Sunday 28 December 2014

This may not be quite as bad as it first seems

Published 02/05/2014 | 02:30

Is the news that Intel has chosen Israel for a fresh €4bn investment indicative that Ireland has in some way lost out? At first glance, it might look that way. Although Intel isn't giving any more detail on the announcement, there are three possible interpretations of what it means for Ireland.

1. Israel has beaten off competition from Ireland to make the company's most important new processors.

This is certainly what Israeli government minister Naftali Bennett is saying: "We competed with the whole world and Intel chose us," he told reporters. This would by no means signify the end of Intel Ireland, where plants are also currently being upgraded. But it might give Intel's Israeli operation – which employs a massive 9,000 people, including 3,000 industrial designers – a psychological boost.

2. Intel is actually splitting its investment between Ireland and Israel.

This is what Intel Ireland will likely argue. Just five weeks ago, the chip giant held a big publicity event at its Leixlip facility where it revealed it has spent €3.6bn on upgrading its Irish manufacturing plant in the last three years. It pulled out all the stops, with Intel president Renée James telling Taoiseach Enda Kenny how important we were (and so on). Was this just a show ahead of what it knew would be the real investment announcement a month later in Israel? It seems unlikely. Any senior Intel executive I've spoken to has unreservedly spoken about a long-term investment in Ireland. And, to be fair, it doesn't make sense for the company to spend $5bn upgrading the plants here unless it intends to retain a huge presence for years to come. So it's possible that the company is dividing its eggs into several baskets.

3. The Israelis are simply bluffing.

Israeli ministers are known for over-egging these announcements. And, after the big performance of Intel Israel's biggest rival (Intel Ireland) in March, authorities there were anxious to get their own bit of good news out. It is possible that the investment sum is for less than was announced.

Irish Independent

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