Intel's planned $2 billion (€2.3 billion) expansion at Leixlip, Co Kildare, will be delayed by at least six months following a decision to change the production process at the facility.
Intel said the plant would not come on stream until 2002, instead of 2001, because it wanted to refocus the factory's output on state-of-the-art 300mm silicon wafers, instead of 200mm.
IDA Ireland played down the delay last night claiming the decision was good news for the Republic and would involve an additional $500 million investment in the facility.
"We're absolutely delighted about this because the focus on higher technology makes the investment more sustainable for Ireland," said an IDA spokesman.
The board of Intel chose the Leixlip facility as a base to deploy its latest 300mm wafer production technology earlier this week. This technology improves the efficiency of production by doubling the number of microprocessors which can be manufactured on a single wafer.
An Intel spokeswoman said last night this would cut down on manufacturing costs by as much as 30 per cent and improve productivity yields.
The decision comes as a worldwide decline in demand for PCs has led to a number of technology companies issuing profit warnings.
The plant will be one of only two manufacturing plants worldwide using this advanced technology. However, the decision will mean a delay in construction of the facility and the rate of recruitment.
The original 40,000 square metre two-storey-over-basement wafer fabrication production expansion was scheduled for completion by the end of 2001. It is now unlikely to be complete until the latter part of 2002.
The plant will employ an additional 1,000 people but the rate of recruitment will be slowed for a period following this decision.
The Leixlip plant already has 3,200 Intel employees and 1,200 people on long-term contracts. The new development will bring its cumulative investment in the country to about $4.5 billion by 2003.
