Intel's Irish plant bypassed for new chips

INTEL'S IRISH plant has missed out on an investment that had been expected to see work on a new product line commence next year. Staff at its plant in Leixlip learned this week that a new line of products that the chip maker had earmarked for the plant will not now be manufactured in Ireland next year.

The Irish Timeshas learned that Joshua Walden, vice-president in the technology and manufacturing group at the giant American technology company, visited the Kildare plant this week and informed executives that the facility would not be required to manufacture the next family of electronic chips.

Although the Irish operations are operating at close to their full capacity, winning the 1268 product line was seen as key to strengthening Leixlip as a key Intel manufacturing facility.

Intel has 15 chip factories, or fabs, at nine locations around the world, including Arizona, California, Colorado, New Mexico, Oregon and Massachusetts in the US, two locations in Israel and the Co Kildare facility.

A spokesman for Intel confirmed that Mr Walden had been in Ireland this week, but said no decision regarding investment had been communicated to employees.

Well-placed sources said that although the decision was unlikely to mean any reduction in Intel staff numbers, it was damaging for morale at the plant.

Staff are now hoping that Leixlip will be used to produce the 1270 line of processors which is expected to go into volume production for 2011.

This would require more advanced manufacturing technology, and a larger investment, than that required to produce the 1268 range.

In September 2007, Intel announced it was seeking 200 voluntary redundancies in Leixlip as part of a global cost-cutting plan. It also emerged at that time that several hundred staff of vendors who worked on-site did not have contracts renewed.

Intel currently employs just under 5,000 staff - directly and through third parties. Two years ago, this figure was as high as 5,500.

One of Intel's older factories on the site was being "retooled" to produce the 1268 line of microprocessors.

This factory, Fab 14, is currently being cleared of machinery in preparation for the refit. Machinery is being moved to the neighbouring Fab 10.

Together these two factories, which were the first Intel built in Ireland in the late 1980s, are called Ireland Fab Operations and produce lower-end Intel products, such as flash memory and logic circuits.

Staff now expect that Fab 14 will be effectively mothballed until the new investment is forthcoming.

The Intel spokesman said that management is constantly "looking at different options" which it can present to the Intel corporation.

Although he would not confirm what, if any, preparatory work was taking place at Ireland Fab Operations, he said it produced older technology.