Intel’s $500m channel mood-lifter

Trade

Intel onside: Chip-maker looks set to help reheat Irish economy

Intel’s $500 million upgrade, announced at the weekend, comes as welcome news at a time when the technology channel finds itself impaled on the twin barbs of economic meltdown and political murk.

The chip-maker says the upgrade of its Leixlip campus will generate 850 construction jobs almost immediately, followed by 200 technology jobs by the time the work at the Co. Kildare site is completed, in about two years.

IDA CEO Barry O’Leary welcomed the announcement. He said it represented a huge “vote of confidence and endorsement of Ireland as a competitive location for global investment”. Intel employs about 80,000 people worldwide.

Commenting on the news, PFH group sales director Liam Halpin said: “I think it’s really good news, and an endorsement from one of the world’s leading technology vendors that Ireland is open for business, so well done to the IDA in securing the business.”

Halpin added: “It will of course spin off business in supply and services to companies here in Ireland. How much of this filters into the local IT industry is hard to tell, as I’m sure that most of this will be specific to building, mechanical and electrical suppliers, or to global suppliers of Intel where the products will be shipped in from abroad.”

Trilogy Technologies MD Edel Creely also welcomed Intel’s decision to continue investing in Ireland. She said the news was “good for the country” because it might encourage more young people to pursue careers in science and technology.

The timing of the Intel announcement is all the more welcome because it coincides with mounting pressure in mainland Europe – in particular by France’s President Nicolas Sarkozy – for Ireland to scrap its iconic 12.5 percent corporate tax rate and fall in line with other European countries, thus removing Ireland’s competitive edge as a magnet for multinationals generating big bucks and much-needed employment.

Intel Ireland general manager Eamonn Sinnott was reported in the Irish Times as saying the construction project involves a total refit of one of the older factories on the Kildare campus.

Sinnott said declines in the cost of construction in the past three years had helped sway Intel in Ireland’s favour, and he noted that maintaining the 12.5 percent corporation tax was key.

The chip-maker, together with its local contractors, provides work for some 4,000 in Co Kildare, with another 300 employed in Shannon at Intel’s R&D facility.

• The channel can take further comfort from a report just released by Goldman Sachs, the global investment banking and securities firm, which said Ireland’s growth in export-led activities during 2010 was higher than had been forecast.

However, the key ingredient still missing from the recipe needed to reheat the Irish economy is consumer confidence, while rising oil prices are cause for concern.

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