Tuesday 24 October 2017

Irish Intel plant has potential rival in China unit

World's largest chip producer seeking to expand global base

Emmet Oliver Deputy Business Editor

Intel's Irish plant, which employs over 4,000 people, has been joined in recent weeks by a plant in China in the manufacture of certain microchips.

In new US filings, Intel has disclosed that the Irish plant, a plant in Arizona and the China plant are all now manufacturing chips using the same type of technology.

The China plant started manufacturing the same 'wafers' as the Irish plant at the end of 2010, Intel has disclosed.

While the China plant is not yet producing all three types of wafers that come from the Irish plant, it has started producing one of the three lines that come from the Irish plant.

Wafers are silicon boards that contain a number of individual chips or microprocessors. They are the main product produced by the Leixlip plant in Co Kildare.

"Our China facility began wafer manufacturing in the fourth quarter of 2010,'' said Intel in the filings.

The Irish plant has been producing waters in different sizes and using different technologies for several years.

The Irish operation at present is the only Intel plant able to produce wafers using one form of technology, but for all other size of wafers the plant must compete either with Massachusetts, or the Arizona or China plant.

Intel has effectively boiled down all non-US wafer fabrication work to Israel, China and Ireland. Some 61pc of this manufacturing is done in a series of plants in the US. Intel is looking to expand its plants around the world at present.

Intel is the world's largest chip maker and is in a strong financial position, including the ability to spend $10bn (€7.3bn) in a share buyback scheme.

It recently reported rising fourth-quarter sales and profit boosted by demand for chips used in data centres, which provide computing services over the web. After announcing the purchase of McAfee for $6.6bn last year, Intel's largest acquisition, investors want the company to use cash to boost their returns more directly.

The company is also expanding its factory network to meet increasing demand for chips. The company said recently it would spend $8.7bn to $9.3bn on plant and equipment this year, compared with $5.2bn in 2010.

It has has called on the US government for tax breaks to make it cheaper to build facilities in the US. Despite this, the company gets three-quarters of its revenue from overseas.

While over 4,000 people work at the Intel campus in Leixlip, there are about another 200 people employed at Intel Communications Europe, its R&D arm in Shannon, Co Clare.

Irish Independent

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