'No change' in Intel's plans for Leixlip

But there are some doubts about its intentions to make new chips in Kildare

When Intel chief executive Paul Otellini said that Ireland would be one of the three factories to produce the next generation of Intel chips, there was the expectation that the boost to the plant and local economy would come in 2013.

But news that the company was recalling up to 600 staff home earlier than expected from the US sparked concern that the Irish facility may miss out on the 14 nanometer chips.

Only a few years ago, the future of Intel looked bright. The company has dominated the desktop computer market for several years, seeing off competition from Advanced Micro Devices and carving out a comfortable niche for itself.

That was good news for the company’s Irish workforce, which numbers more than 4,000 people.

However, if there is one thing that the tech industry knows, it’s that nothing is set in stone. This year’s market leaders could be next year’s followers as the technology industry constantly evolves.

The PC market is contracting as people do more computing on iPads and Android phones. This year the sector will post its first annual decline in more than a decade, research has claimed.

Intel, meanwhile, has been slow out of the blocks to capitalise on the new sector, as mobile-makers sought more power efficient chips.

Despite the difficulties presented by an evolving market, though, and a stagnant consumer economy, Intel Ireland is confident that the plant will continue to play an important part in the company’s future, executives insist.

The Irish operation is still “on the roadmap” for the 14 nanometer chip, according to general manager Eamonn Sinnott, with Arizona already announced as a manufacturing location. Intel manufactures in dual locations for operational reasons.

“There is no delay, there is no change,” he says. “Paul Otellini has identified Ireland as being on the 14nm and beyond roadmap. There is no change to that.”

The company has a theme of “closing, reopening, innovation and renewal”, Sinnott adds, with Intel Ireland’s Fab 10 closing in 2011.

Refurbishments at the company’s existing Fab 14 facility are almost complete and Intel has also been granted planning permission to build at the Collinstown campus in Leixlip.

As yet, though, there is no firm date for manufacturing of the new chip, known as the 1272 process, to begin. It is understood that while it is still expected to go ahead at the Kildare facility, it could be late in 2013 or early in 2014 before it happens.

Intel has a policy of applying for “preparatory” permission, which means it is ready to begin construction when Intel’s decision makers give the go-ahead.

Intel also insists that its recalling of 600 employees was all within normal business practices for the firm, with its business hinging on the economic conditions around the globe.

“The headcount of people being sent home, they weren’t people that were associated with preparing for the new technology,” Sinnott says.

“They came home a little bit earlier than they otherwise would have, and that’s a very normal activity – moving people around the world for wherever the work is.”

As one of the biggest private sector employers in the State, Intel is always under the microscope.

The company has been in operation in Ireland for more than 20 years and has consistently evolved its business over the years, moving from European system supply manufacturing business to manufacturing microchips.

However, the changing technology landscape and the company’s failure to initially capitalise on mobile and tablet devices have left it playing catch-up in the sector. It has less than 1 per cent of the market for chips and smartphones, with ARM and Qualcomm dominating instead.

Intel is hoping that the new generation of Medfield phones, which are powered by Intel chips, will help redress the balance.

The Motorola Razr i is the first of them to be available in Ireland; others include the Orange San Diego handset, the Lenovo K800 and the Lava Xolo X900.

Intel’s lack of movement in the mobile market has already claimed one high profile name; Paul Otellini is set to step down in May, three years earlier than planned.

There was good news though for the chipmaker this week. A benchmark report on the phones’ performance may give the Medfield platform the boost that it needs.

Bernstein Research analysts said that the chips were as energy efficient as their competitors, which could lead to a greater uptake by phone makers in the coming years.

Intel may also be counting on a boost from Windows 8 devices. Microsoft’s latest operating system has only just hit the market, but the tech giant is hoping that it will help tackle the growing decline in the PC market and boost Microsoft in the tablet sector.