Intel creates 400 jobs in €1.6bn deal

COMPUTER chip manufacturer Intel is to invest €1.6 billion and create 400 jobs at its Kildare plant in a "major coup" for the economy, Tánaiste Mary Harney announced yesterday.

In one of the largest investment deals ever negotiated by the IDA, the leading semiconductor manufacturer will produce the next generation of computer chips at its Leixlip site.

Ms Harney said the money would be invested over a number of years and production would begin in 2006.

"It is very significant for Ireland to have won this investment amid intense competition from around the world," she said. "This investment could have gone anywhere. Leading technology will be taking place here, so it is highly significant."

The project is being backed by the IDA, though its grant to Intel is subject to EU approval.

It will bring the number employed by Intel in Ireland to more than 5,000.

Intel plans to equip the Leixlip plant with the technology to produce the next generation of chips, which will be smaller and faster and will use less power than those currently produced.

Construction of a new facility at the plant will begin immediately, with production starting in the first half of 2006.

This is the second multi-billion expansion by Intel here in the past two years. In 2002, it created 1,000 jobs as part of a €2 billion investment at its Fab 24 computer chip plant in Leixlip.

The latest expansion brings the total spent by Intel in Ireland to e6 billion since it came here in 1989 the highest ever by a multi-national company here.

Intel general manager Jim O'Hara said yesterday the country faced stiff competition from other locations for the investment.

He said Intel looked at a number of its plants in America and even considered setting up in Israel or Asia.

However, despite an increase in the cost of doing business in Ireland, Intel decided to expand here because of the quality of the workforce and the low corporation tax rate.

Mr O'Hara said he hoped the investment would spur more companies to create jobs in the country and did not rule out further expansion by Intel.

IDA chief executive Sean Dorgan said it was too soon to tell if their would be an increase in the number of jobs created by multi-national companies this year.

Intel had to make the announcement yesterday as it was obliged to tell the stock exchange about market sensitive developments as soon as possible.

It is the world's largest maker of computer micro-processors.

It had sales of more than €6.7 billion last year and made profits of €1.4 billion.