State in running for new multibillion Intel investment

The Republic is in the running to land a major new multibillion-dollar Intel investment, the tech giant's chief executive Pat Gelsinger has said.

The move comes just months after Intel announced plans to create 1,600 new jobs as part of a $7 billion (€6 billion) investment in the three years to the end of 2021 aimed at more than doubling the manufacturing space at its Irish operation.

Intel is planning to invest as much as €80 billion in Europe over the next decade to boost the region’s semiconductor production capacity, with plans for two major new European fabrications plants to be announced by the end of the year.

There has been speculation that Germany and France would be most likely to land the investments, with Poland – where Intel has had operations for many years – also up for consideration. However, speaking to The Irish Times on a visit to the company’s facility in Leixlip, Co Kildare, on Thursday, Mr Gelsinger indicated that Ireland was also in the running to secure the investment.

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“We are in the process of identifying the next site and have been seeking proposals from the various European states. We received about 70 and several of those are from Ireland. There is one in particular that looks particularly promising out of three received,” he said.

Mr Gelsinger said a key advantage for Ireland in landing the investment is Intel’s long relationship with the country, which means State agencies know what it needs in terms of facilities.

“There is a lot more understanding and confidence in an Irish proposal, because you know what you’re talking about because you’ve been doing this with us for 32 years,” he said.

“Now we’ve made it very clear that we are looking broadly across Europe [in terms of investments] and it is very important it is seen as an EU project and is about raising the technology footprint of Europe as a whole. Even though there are going to be clear winners, we want everyone to feel like they are a winner,” Mr Gelsinger added.

State to gain

He said that even if Ireland doesn’t secure the new investment, the State will gain from the company’s move to increase chip capacity in Europe generally.

The continent’s global share of semiconductor manufacturing has dropped from 44 to just 9 per cent over the 32 years for which Intel has had a presence in Ireland, even as semiconductor demand continues to grow. The company is looking to boost capacity in Europe and sees its Irish operation playing a key role in its strategy.

Mr Gelsinger said discussions at a global level on corporate taxation and its possible impact on Ireland would not affect investment decisions either now or in the future.

“You think I’m ever going to move this fab [fabrication plant]?” he said. “This is a massive investment for us. . . You’re stuck with us, and we are stuck with you.”

Intel announced plans to locate its European headquarters in Ireland at a former 146-hectare (360-acre) stud farm in Leixlip in 1989 with the first chip manufactured locally in 1993. By the end of this year, it will have committed $22 billion in investment in the State. It currently employs 4,900 people directly. There are also about 1,500 indirect employees working at the Co Kildare campus on a permanent basis and about 6,000 construction workers supporting the current expansion project onsite.

Diversity and inclusion

Nonetheless, while saying that the State’s proposal for a new “Megafab” facility were promising, he did point out that there were some factors that could impact whether the company continued to invest locally.

“You have a little bit of advantage here [over other countries] because we have been doing this together for a while but there are a lot of things that you aren’t doing. Like on the diversity and inclusion front, there are far too few female engineers and I’m not happy about that. I find it disappointing how far from the rest of the world Ireland is on this point. I love Ireland but that is one thing you’re not doing okay with,” he said.

Mr Gelsinger earlier this week announced plans to open up its Leixlip plant for other companies to use to it help alleviate a global shortage that has disrupted car production in particular. Intel is the biggest maker of processor chips for PCs and data centres globally. But with car manufacturers also increasingly using them in vehicles, Mr Gelsinger is keen to see the company increase its market share in the space by allowing other organisations to use Intel technology to develop their own chips.

He said the company’s “foundry services” initiative is just one of many plans Intel intends to take to regain momentum after starting to lag competitors.

“We’re famously known for our clients and our server products. They are still our biggest businesses. But we’re also going to be in the graphics and gaming business, we have a set of AI products that we are launching and are significantly expanding our networking business,” he said.

“I’m expecting these businesses to be significant new areas of growth and revenue for the company, even as we grow out our core cloud, and client operations as well. However big we are today, my goal is to make us significantly bigger over the next four or five years.”