Chipmaker Intel has said it will create 1,600 permanent hi-tech jobs at its Leixlip campus, once it has completed the construction of a new chip manufacturing factory there.

The company also revealed that it has invested an additional $7bn in its manufacturing facilities in the Co Kildare campus over the past three years, with more still to be spent on the new infrastructure.

The details emerged as new CEO Pat Gelsinger announced new plans for the company, which has struggled with a number of challenges in recent years.

Eamonn Sinnott, Vice President of Manufacturing and Operations and General Manager of Intel Ireland, said the company is accelerating investment in Europe and supporting the EU's ambition of having 20% of the world's silicon chips manufactured locally.

"Since 1989, we have invested $15 billion in current manufacturing capacity in Europe, ensuring that Intel is one of the largest and most advanced semiconductor manufacturing operations in the region," he said.

"But we're not stopping there. In an effort to more than double Intel's available manufacturing space in Ireland and Europe, we have invested an additional $7 billion from 2019 to 2021 in an ongoing expansion."

The construction site at Intel in Leixlip

Mr Sinnott said the investment is designed to bring Intel's latest generation 7 nanometer process technology to the region and expand its manufacturing operations.

"It will also drive economic growth in the region, creating 1,600 permanent high-tech jobs once complete and over 5,000 construction jobs," he said.

The construction of the new fabrication plant or FAB is about half way through the estimated four to five-year time frame.

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Mr Sinnott also indicated that there will be additional opportunity for further investment in the region, arising from the announcement that the company plans to set up a separate foundry business to manufacture chips designed by others.

Traditionally, Intel has both designed and manufactured its own chips.

Intel, which has been in Ireland since 1989, currently employs just under 5,000 people in the country, with 4,500 working in Leixlip and the balance based in offices in Cork and Shannon.

A spokesperson for Intel said the Leixlip project is around halfway complete so it will take another couple of years before the expansion is completed and the 1,600 new positions are filled.

Sarah Sexton said the jobs will be largely technical roles such as engineering and technicans. 

Ms Sexton said it is a testament to the skilled workforce in Leixlip that the company has operated there for nearly 30 years and Intel is confident that it will be able to recruit the neccessary people. 

She added that Intel will also actively engage with the education system to be able to support the new jobs through student programmes or work with universities. 

Demand for Intel technology is exponentially growing and the company is redoubling its efforts in manufacturing, she added.

She also said that Intel wants to do more manufacturing in Europe but that it is not known whether this will be in Ireland or elsewhere. 

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The Taoiseach, IDA CEO Martin Shanahan and Eamonn Sinnott from Intel discussing the investment

News of the fresh investment was welcomed by the Taoiseach, the Tánaiste and IDA Ireland.

"The level of Intel's commitment to Ireland and its impact on the Irish economy has been, and will continue to be, enormous," said IDA Chief Executive Martin Shanahan.

"The scale of the investment and the number and types of jobs being created is a huge vote of confidence in the Leixlip campus and is testament to Intel's continued commitment to Ireland.

"Furthermore, the company has signaled that there will be an opportunity for additional investment as it plans to announce another phase of expansions in locations including Europe in the next year."

The Taoiseach said Intel had made an enormous contribution to Ireland.

"Intel’s journey in Ireland has been an extraordinary one and these plans for the next phase of its development will enhance its reputation as a global leader in semiconductor innovation and manufacturing," stated Micheál Martin.

"Already a substantial employer in Ireland, with some 5,000 employees, these further new jobs will be most welcome."

Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar described the expansion as massive.

"It’s another huge vote of confidence in Ireland’s future," he said.

"The company has demonstrated not just longevity and resilience in its 32 years in Ireland but an ambition to continuously innovate and develop. That growth has been of enormous benefit to the entire country," he added.

County Kildare Chamber chief executive Allan Shine has welcomed Intel's jobs announcement. 

Mr Shine said that Intel is a key stakeholder in the region and the jobs announcement reinforces the message that Kildare is the location of choice for both existing and potential business enterprise. 

He noted that Intel Ireland contributes €1.08 billion each year to the Irish economy and supports 6,669 full time equivalent jobs in the economy. 

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"As we are consumed with hourly updates in regards to Covid and also the concerns we face with Brexit ongoing, the Chamber welcomes the job announcement and look forward to the continuing success story of Intel in Kildare," he added.

Ibec, the group that represents Irish business, also welcomed the announcement from Intel.

Ibec's Director of Membership and Sectors Sharon Higgins said that since its arrival to Ireland in 1989, Intel has "consistently signalled its confidence in the depth and substance of the Irish business model". 

"Its ongoing investment over the past 30 years has played a significant role in catalysing the advanced, dynamic business model that underpins our domestic economy.

"The announcement from Intel today will ensure that the manufacturing sector in Ireland continues to grow from strength to strength. 

"Ireland was the only country in Europe where manufactured exports grew in 2020, despite the Covid crisis. 

"Indeed, Ireland is only 1% of the EU's population but accounts for 5% of its manufactured goods exports to the broader world," she added.

Intel to challenge Asia dominance

Intel last night also announced plans to spend as much as $20 billion to build two factories in Arizona and open its factories to outside customers.

The move by CEO Pat Gelsinger aims to restore Intel's reputation after manufacturing stumbles sent shares plunging last year.

The strategy will directly challenge the two other companies in the world that can make the most advanced chips, Taiwan's Semiconductor Manufacturing and Korea's Samsung Electronics.

It also aims to tilt a technological balance of power back to the US and Europe as government leaders on both continents have become concerned about the risks of a concentration of chipmaking in Taiwan given tensions with China. 

Intel shares rose 7.5% after the company disclosed its new strategy and full-year financial guidance for 2021. Some investors such as Third Point had previously urged Intel to consider spinning off its costly chip manufacturing operations. 

Intel said it expects $72 billion in revenue and adjusted earnings per share of $4.55, compared with analyst estimates of $72.9 billion and $4.77 per share, according to Refinitiv data. The company said it expects to spend $19 billion to $20 billion on capital expenditures.

Gelsinger said that 2021 forecast "reflects the industry-wide shortage" of some components such as substrates.

Intel is one of the few remaining semiconductor companies that both designs and manufactures its own chips. Rival chip designers such as Qualcomm and Apple rely on contract manufacturers. 

Gelsinger said Intel has "fully resolved" its problems with its most recent manufacturing technology and is "all systems go" on chips for 2023, adding that it is now planning a massive manufacturing expansion.

Intel said it will use its new factories to make its own chips but also open them to outside customers in what is called a "foundry" business model in the chip industry. 

Gelsinger said the new factories will focus on cutting-edge computing chip manufacturing, rather than the older or specialty technologies that some manufacturers such as GlobalFoundries specialise in. 

"We are absolutely committed to leading process technology capabilities at scale for the industry, and for our customers," Gelsinger said, adding that Intel has lined up customers for the new factories but could not disclose their names.

He did say on a webcast that, Cisco Systems, Qualcomm and Microsoft support its efforts to offer chip manufacturing services and added on a conference call that Intel "will pursue customers like Apple." 

The move is a direct challenge to TSMC and Samsung. The two have come to dominate semiconductor manufacturing business, moving its centre of gravity from the US, where much of the technology was once invented, to Asia, where more than two-thirds of advanced chips are now manufactured.

Intel has given few details of exactly how it will use outside factories, but analyst Patrick Moorhead of Moor Insights and Strategy said he expects Intel to use them as "gap fillers for some of the highest performance" chip parts until Intel can regain a manufacturing lead over its rivals.

Additional reporting by Reuters