Intel’s Irish R&D unit’s profits drop 24% to €3m

Pre-tax profits at chip giant Intel’s Irish R&D arm last year declined by 24% from $5.4m to $4.1m (€3m).

This followed revenues at Intel Shannon Ltd declining by 5% from $59.3m to $56.5m in the 12 months to the end of Dec 29 last.

Researchers at Intel’s ‘Irish Design Centre’ in Shannon are engaged in developing the most advanced silicon technology on the planet and new figures show the 213 staff shared $22.4m in pay or $105,352 (€79,482) each on average.

The figures show that pay to the 213 staff, including directors, totalled $22.44m — that included $17.9m in salaries, with $2.66m in share-based payments and $1.83m in pension costs.

Some 177 of the 213 staff are engaged in R&D with 36 in management, administration that includes sales and marketing.

R&D personnel at Intel’s Shannon base are dealing with nanometres, which is a billionth of a metre, and this gives 3,000 electrical devices on the width of a human hair.

Shannon Development’s annual report for 2011 revealed that the agency paid €3.5m in grant aid funding to Intel Shannon during that year, bringing to a total of €9.57m in grant aid paid to the firm by the agency.

The payments in 2011 accounted for over half of the grant aid payments made by Shannon Development to all firms in the Free Zone in 2011.

The company’s operating profits decreased by 24.5% from $5.3m to $4m.

According to the directors’ report “the decrease in the operating profit margin is primarily attributable to movements in expenditure that is rechargeable to Intel Corporation under the R&D recharge agreement held between the company and the Intel corporation”.

The company’s cost of sales last year increased from $49.4m to $50.2m, while administrative expenses increased from $4.4m to $2.2m.

The filings show that the company has $37.1m in shareholder funds with $25.1m in accumulated profits.

On the company’s future developments, the directors state that the company “will continue to research and develop improvements in communication and networking technologies”.

The figures show that the profit last year takes account of €2.5m in non-cash depreciation, with directors’ remuneration decreasing from €507,096 to €443,568.