Race for Ireland to secure Intel $80bn investment hots up after EU warning

Intel's decision will be the first major test of Ireland's ability to attract FDI after signing up to minimum corporate tax accord

Competition commissioner Margrethe Vestager warned that governments of EU members must not fall prey to chipmakers playing them off against each other. Picture: Sam Boal

The race to secure an $80bn (€70bn) foreign direct investment project from chipmaker Intel, potentially involving up to 10,000 jobs for Ireland, is hotting up as the EU has warned off governments over offering inducements. 

Chipmakers may play governments off “against each other” for subsidies to fix semiconductor shortages, the EU competition chief Margrethe Vestager warned in a speech in Leuven in Belgium.

Ms Vestager’s words seem targeted at Intel, which is chasing European support to help build more local chip capacity. European leaders have called for more investment to alleviate a supply shortage that’s rippled through several industries.

The Irish Examiner has reported that Ireland is only weeks away from learning if it has secured the $80bn foreign direct investment project from Intel which will in time create up to 10,000 jobs.

Intel already employs more than 5,000 people at its sprawling 360-acre facility in Leixlip, Co Kildare, and at a site at Shannon, Co Clare and the investment will be the first test of Ireland's ability to attract huge projects after the Government last month signed up to the global accord to increase corporation tax to 15%.

Tough competition from Germany

Ireland faces tough competition from Germany, which was among the group of the most powerful nations that pushed for the new way of taxing multinationals. 

The Intel decision involves it building a new plant to make a new generation of chips. It already makes chips for servers, PCs, and almost every other internet-enabled product, in Ireland. 

Its original investment in Ireland over 30 years ago has been hailed for effectively heralding the Celtic Tiger era for huge value exporting by multinationals from the island.             

The investment would require a greenfield site of 1,000 acres because there is no space left at Leixlip to accommodate the investment Intel has in mind. 

It first announced in March plans to build a new manufacturing facility in the US, and said it was looking to construct two more sites, in the US and Europe. 

Irish facility is Intel's largest ever investment

The $80bn investment involves Intel building up to eight so-called modules worth €10bn each. That means that over a number of years any new site would host 10,000 manufacturing jobs.

It is the largest ever investment by Intel, which will have invested $22bn in Ireland by the time it completes the latest expansion at Leixlip next year.

Its Irish workforce, which will grow to over 6,500 when the 1,600 new jobs at Leixlip come onstream, could in time swell to 16,500 if Ireland were to secure the huge project. 

The EU would need to invest up to €330bn upfront to fully supply its own chip demands, Ms Vestager said. 

“Self sufficiency is an illusion” that would lead to “more expensive chips and a negative impact on all kinds of markets,” she said. She called instead for a diversified supply chain.  

Co-ordinated export controls are also needed, she said, a reference to US measures that some European officials have blamed for worsening chip shortages. 

• Irish Examiner and Bloomberg