In tech battle between Irish and Israelis, Intel Ireland will fight
Published 08/05/2014 | 02:30
Last week, a $6bn Intel investment in Israel was unveiled by Israel's government, raising questions about how Intel was positioning its Irish and Israeli facilities ahead of its next big manufacturing process.
The move, not yet officially confirmed by Intel, came a month after the semiconductor giant divulged that it had spent $5bn (€3.6bn) on upgrading its Irish facilities in the last three years and a whopping $12bn on its Irish facilities over its 25 year period here. So where does the chip-maker see its future? Is Ireland competing with Israel for Intel's next major product line? And what exactly will Intel be making in its updated Irish plant? Eamonn Sinnott, general manager for Intel Ireland and vice president of Intel's technology and manufacturing group, recently answered a few questions on the topic. (Note: this interview was conducted before the Israeli government's $6bn investment statement.)
AW: Intel hasn't yet said where it's next big plant will be located. Will it be Ireland?
ES: Well, we've just made a major announcement revealing the massive investment here in Ireland. I understand the question intimately. It's one that staff ask all the time. But we have to develop a capability and a competence to demonstrate that we're capable of doing this. There's no magic condition that says somehow it's our right to have it. But if you look around [the Intel campus] and see the millions of square feet of buildings and the thousands of people, I've never been as confident and as optimistic about our ability over the next 25 years as I am now.
AW: Last year, Intel applied for, and received, planning permission for a new plant specifically in anticipation of a new facility to make a new line of processors. Is the ongoing $5bn investment here anything to do with that?
ES: No, they're completely unrelated. When it comes to the question of Intel wanting new capacity somewhere on the planet, we want to be able to put our hands up and say we're ready. Having a good track record, a highly skilled workforce and an attractive taxation rate is very important. But so is having a series of permits already in place so that we can take advantage if or when it comes about. That's what we got with what we call Fab 34 and the planning permission that Kildare Co Council gave us last year. And that sits now ready to be used if and when the corporation needs to use it.
AW: What about Intel's other major manufacturing sites in Israel and Arizona? There's a widespread perception that Ireland is in competition with these other locations for the next major piece of investment from the company.
ES: Well, if we're not able to demonstrate that we can be the best in the world, then we sort of lose the right to be able to attract any further investment. But in any case, to characterise it as internal competition among a few would be too narrow. I know that people often characterise that way, but it's more about global competition. Yes, the Israeli side are celebrating their 40th anniversary this year. And they are very busy on leading edge product technologies and they've got great design capabilities. They're thriving. But I can honestly tell you that there isn't a state in America or a country on the planet that wouldn't dearly love a facility like we're building here. Our facilities are magnificent. They're engines of creativity and capability. They're world class.
AW: So there are no further internal signs of the next big process going one way or the other?
ES: Well to have our president come in and stand up and confirm a $5bn investment and talk about how good the workforce is . . . I couldn't have paid for that or scripted it any better. So I think it's a great sign. We've $12.5bn of capital in the ground and with a workforce that has demonstrated world-class capability. They are hugely attractive and indicative that unless we do something crazy or shoot ourselves in the foot, we will remain in pole position to continue the track record over the last 25 years.
AW: Does it ever irritate you being dragged into a narrative about big tech firms and tax avoidance?
ES: Thankfully, none of that applies to us because we don't have any special deals. It's open and transparent. We have a 12.5pc rate that applies to us. And even through the worst economic crises of our country, there was a strong signal sent that that wasn't changing. I can tell you that that was hugely helpful for me in the discussions with the decision-makers in Intel, who have 10 and 20-year investment horizons. And this shows, compared to others who have much less vested in Ireland by way of deep roots. We're anything but a brass plate operation. Intel is fundamentally different that way. And I think we've proven it, with the largest investment in the history of the state, 4,500 permanent jobs and 5,000 construction jobs at present.
AW: With so many people here working across different disciplines, has unionisation ever become a factor in industrial relations?
ES: Most employees just don't see the need for a union. If we were somehow treating people badly or were guilty of inappropriate behaviour that might be the day that people might start to seek representation by third parties for them.
But it would be such an antithesis for our business because it is so dependent on a rapid and open flow of communication from folks. The pace of responsiveness that we have here is something we cherish very much.
Don't get me wrong, we've no difficulty whatsoever with unions and there are a lot of [contracting] companies operating here that are fully unionised. And there's nothing to prevent anyone from joining a union at all. But it's hard to see anything you could point to that would be better done if there were someone else representing you.