Intel underscored its commitment to Ireland yesterday, opening a new microchip facility and announcing that it would spend $300 million (£215 million) upgrading its existing plant. The moves bring total investment in Ireland by the world's leading chip manufacturer to £1.8 billion since it first located here nine years ago.
The new fabrication facility - Fab 14 - is the company's first 0.25 micron microprocessor production unit in Europe.
The 800,000 square foot plant at the company's Leixlip base cost more than £900 million to build and equip and represents the largest construction project ever undertaken in Ireland. Construction costs ran to £265 million, of which 65 per cent (£173 million) went to Irish contractors. The company also announced yesterday that it will spend £300 million upgrading its existing Fab 10 plant. This will see it also producing chips at 0.25 microns, and - according to Intel - guarantee that it remains central to the company's medium-term business strategy.
Newly appointed Intel president and chief operating officer, Dr Craig Barrett, said that Intel would convert its entire microprocessor production to 0.25 micron technology by the beginning of the fourth quarter of this year. "Ireland will play an important role in that conversion," he added.
However, Dr Barrett told a press briefing at the plant that further employment there was unlikely in the short term, owing to Intel's poor first quarter, and a belief that productivity could be increased without hiring additional staff.
Since the announcement of plans for Fab 14 in October, 1995, an additional 1,600 people have been employed in Leixlip, bringing the total workforce to 4,200 by the end of this year.
Dr Barrett said the company's intention at present was to reduce its global workforce of 60,000 over the next six months by 3,000, though it is expected this can be achieved through "natural attrition".
He said that the possible changes in work practices as a result of the Amsterdam Treaty could be an area of concern to Intel if it were to interfere with the company's current relationship with Ireland.
Intel Ireland represents the largest ever capital investment in an IDA sponsored project.
Intel paid £27 million in tax in 1997 based on Irish sales of £873 million for 1996.
The Taoiseach, Mr Ahern, who officially opened the facility, said: "Employing over 42,000 people directly, the IT sector now accounts for 40 per cent of the net growth in employment. We now have 60 of the leading 200 world IT companies. This is a remarkable achievement."
