Ireland and Israel compete for €3.4bn Intel investment

IRELAND and Israel are engaged in an intense and extremely sensitive battle to win a €3.4 billion Intel Corporation investment to build a cutting edge computer chip manufacturing facility with the capability of creating 1,300 jobs.

Indications from Tel Aviv suggest that the Israeli government feel they are fighting a rearguard action to win the project in the face of tough competition from Ireland.

Irish authorities have not confirmed that talks are ongoing to secure the deal for Intel’s Leixlip campus, where the company already employs more than 4,000 people.

Once a site is chosen it is not clear when construction of the €3.4bn state-of-the-art facility will commence, to produce market leading 15-nanometer processors.

The Israelis fear their “take-it-or-leave-it” grant aid offer has been dismissed by Intel, who wanted a more flexible approach.

Ireland is constrained by EU regulations and cannot offer Intel a grant package that exceeds those offered by other member states.

The Israeli business daily Globes quoted an Israeli government official as saying. “The impression we’re getting from Intel’s representatives is that it is leaning heavily toward Ireland.”

The official added that Intel was still interested in building an assembly plant in Beit She’an in the north of Israel.

An Israeli government source told Globes: “We haven’t missed the train yet, and we should use every means with Intel to keep the investment in Israel.”

The Globes report indicates that Intel Israel executives favour the Beit She’an site.

Intriguingly, references to a cabal of Intel executives favourable to Ireland, because they worked here, have also begun emerging in the Israeli press.

“But Intel’s headquarters in the US see things differently, and it’s possible that headquarters is being influenced by officeholders who previously worked in Ireland,” a source told Globes.

Meanwhile, TechEye, under the headline “Israel leans on Intel to dump the Irish” reports: “Intel is being lobbied by the Israelis to get it to change its mind about setting up shop in Ireland.”

However, in its typical house style, it continues: “Intel wants to build a $4.8bn 15-nanometer process in the Emerald Isle, partly because of the range of sweeteners that the cash-strapped Irish government came up with, and partly because 15 nanometers is so small that it requires leprechauns to build.”

Ireland appears well positioned to attract the facility, with work already underway in Leixlip on upgrading an older facility. Work began in February but has slowed in recent weeks, suggesting Intel is unsure about the timing of any multi-billion dollar investment in the current economic climate.