Technology giant's investment makes Irish Fab facility too valuable to shut down

As some of the State's biggest employers with many well-paid "knowledge economy" jobs on offer in the Republic, technology giants like Intel are valued employers and an important presence for Ireland Inc.

Intel employs about 5,500 people directly or indirectly and, to date, has pumped €5.5 billion into the Irish economy.

Given that investment, and the size of their operations, would Intel ever pull out? Predictions of the demise of Intel have, so far, been rather premature.

One economist at the time of the dotcom crash opined that tumbleweed would soon be rolling down the streets of Leixlip. Instead, the company opened two new multibillion euro chip fabrication plant extensions, increasing output and adding several thousand jobs.

And during every round of job cuts the company has gone through, the Republic has either been left alone or felt minimal impact. What keeps the jobs here? First, the sheer scale of investment in chip "fabs". Each is a small, independent, cutting-edge tech municipality with its own electricity, water and waste system, costing, in the case of Intel's latest Fab 24-2, €1.6 billion.

When you invest that much upfront, you don't tend to consider closing a facility, except under the most catastrophic economic pressures. They are simply too valuable to Intel.

Also vitally important is that, according to Intel Ireland general manager Jim O'Hara, the Irish facility has the single most productive chip manufacturing line within Intel. Some 98 per cent of its wafer output is usable; wafer manufacture is so expensive that this represents an enormous benefit to the company.

Though the natural life of a chip fab is about a decade, they can be retooled for newer manufacturing processes. Given that Intel has three fabs, the company would presumably follow the usual approach of shutting down one for refurbishment while the others continue to operate.

But this is not to say the company might not choose to wind down operations over time. Intel is well known as one of the most competitive, ruthless and litigious of technology companies - summed up in the well known motto of Intel co-founder and past chairman Andy Grove: "Only the paranoid survive."

Intel Ireland is not shy about raising issues that concern it publicly: these include the ongoing decline in the science and technology graduates it needs as employees, a lack of speed and flexibility in regulatory areas and some alarm over rising costs.

The importance of Intel to the economy and as a flagship presence means the Government tends to listen to any of its sabre-rattling. But it is hard to judge at which point any of these factors would ever push Intel to exit Ireland.