Winning a further €12 billion in investment from Intel is welcome but we should not lose sight of what the State has lost in not securing one of the chipmaker's new flagship mega-plants, a leading Irish entrepreneur has said.
Daragh Murphy, founder and chief executive of Imprint Payments, which recently raised $38 million (€34.6 million) in a funding round co-led by Stripe, said most people have not realised the scale and significance of the opportunity that has been lost.
“To put it simply, this is a tragedy for Ireland and for our ambitions of having one of the world’s most advanced economies,” he said.
He has criticised the Government and IDA Ireland for not doing enough to secure the new plants, which will focus on the cutting-edge technologies.
“We had the opportunity to be at the forefront of the most important technology for the future. And to build an ecosystem beyond that,” Mr Murphy said.
Intel on Wednesday announced that the State had narrowly missed out on becoming home to two large new semiconductor factory sites or “mega-fabs” as they are also known, to Magdeburg in Germany. The new plants will attempt to produce chips smaller than two nanometres, something that Intel has yet to achieve. The company, which produces all its semiconductors in Europe in Leixlip, did however, announce an additional investment locally in its “Fab 34” facility that will bring to €30 billion the total invested here by Intel since 1989.
Intel chief executive Pat Gelginser praised the Irish bid to secure the mega-fabs, but told The Irish Times that some other regions showed more "aggressiveness" in their proposals.
Many onlookers believe that it was never likely that Intel would select the Irish State for the new facilities. But Mr Murphy has criticised the Government and IDA Ireland for “snatching defeat from victory”, arguing that we had everything needed to be the ideal location for the chipmaker and should have made every effort necessary to win the mega-plants.
He added he expected the work that is done in Leixlip will be commoditised and done elsewhere for less in the future, meaning our reputation as a leading semiconductor hub will wane.
“Intel’s recent push to build its own leading-edge fabrication mega sites was an opportunity for Ireland to become the new, more geopolitically stable Taiwan,” he said.
“If these facilities were in Ireland, the State would benefit from the immediate influx of capital and the creation of construction jobs required to build them. Once the facilities were operating, new graduates would have thousands of high-paying jobs available to them at Intel and in the ecosystem that would spring up around Intel’s new sites. Longer term, Ireland would have a workforce with a unique, proprietary knowledge-base related to leading-edge semiconductors-the most valuable supply chain in the world. And aside from the economic benefits of future-proofed jobs and a massively increased tax base, Ireland would gain immense geo-political leverage from becoming a critical node in the world economy,” Mr Murphy added.
He said that “despite Ireland having every advantage in competing for Intel’s new facilities”, the State had failed to seal the deal.
"Semiconductors are the building blocks for all technology. As so much more of the world and the devices we use every day come to rely on computing power, semiconductors permeate an ever-increasing share of our lives. Semiconductors' importance can be seen in the combined trillion-dollar market capitalisation of leading semiconductor companies like TSMC, ASML, Nvidia, and Intel, and in the geopolitical fight over Taiwan, which manufactures almost all of the world's leading-edge semiconductors," Mr Murphy said.
“Intel’s own ceo said Ireland lost because of the “aggressiveness [Intel] saw in some of the other [countries’] proposals. Put differently, somehow our politicians and the IDA snatched defeat from the jaws of victory by not understanding this massive opportunity or not prioritising it correctly.”
Mr Murphy, whose company raised over $50 million in its first year in operation, is a self-declared "semiconductor enthusiast", hosting two podcasts on the subject. Imprint, which he founded in August 2020, is a branded payment and rewards provider whose other backers include a who's who of top investors, including well-known Silicon Valley venture capital firm Kleiner Perkins, and Thrive Capital.
The entrepreneur said we should be extremely wary of seeing the €12 billion investment announced this week for the State as a “win”.
“Don’t let the Government’s celebration of Intel’s further investment in its existing Irish operations fool you, the new leading-edge facilities were the real prize. They provided a generational opportunity for our country to be at the forefront of the future and to greatly enhance Ireland’s platform for good in the world. The leaders of our political coalition have let us down at a scale unprecedented even for them,” said Mr Murphy.
Engineers Ireland was among the organisations to welcome Intel’s investment here although president Orla Feely picked up on comments made by Intel chief executive Paul Gelsinger on his last visit to Leixlip when he said the lack of women engineers here was a blackmark against the State as an investment location.
Intel’s chief executive was right to point out last September that we need more female engineers in Ireland.
“The fact remains that women are not represented in the engineering profession at the level we would want in order to maximise our talent pipeline.”