Up to $6 billion (€4.45 billion) of Intel earnings from its non-US companies could be eligible for repatriation to America, the computer chip manufacturer has said. The US government is offering a favourable tax rate of just 5.25 per cent to encourage firms to bring back earnings to the States, reports Barry O'Keeffe
However, a spokeswoman for Intel's Irish operations said the scheme, known as the American Jobs Creation Act 2004, will have no impact on the multinational's business here, even if Intel decides to take advantage of what is a temporary tax incentive.
"Within our operations in Ireland, we generate sufficient cash for general and future investments and the rest goes back to corporate," she said.
Intel employs up to 4,700 people, of which 3,700 are employed directly at the US company's plant in Leixlip, Co Kildare. A further 100 work in Intel Communications Europe, designing and developing networking processes.
In a statement issued late on Thursday night, Intel said it is reviewing the repatriation to the US of monies it holds abroad. It said it did not yet have formal plans on the issue, but pointed that it could accrue some tax charges should it choose to do so.
Intel, the world leader in microchip production, has raised its quarterly revenue outlook, citing strong worldwide demand for its microprocessors and reduced levels of inventories. Subsequently, after-hour trading in its shares rose by 7 per cent following Thursday's announcement.
Revenue in the quarter ending December 25th is now expected to reach $9.3 billion to $9.5 billion. This is up from an earlier target of $8.6 billion to $9.2 billion. At those levels, Intel will set a new high, breaking a record of $8.74 billion set in last year's fourth quarter.
The news came as a welcome relief for the chip maker, which recently cancelled plans for a high speed Pentium 4 chip for desktop computers and abandoned a much-touted move into television chips. Intel, whose chips run about 80 per cent of the world's personal computers, has also been losing market share to rival Advanced Micro Devices Inc.
Intel's outlook was significantly better than most analysts had expected, though some Wall Street exerts have said Intel set the bar for the fourth quarter relatively low.
Meanwhile, Intel's chief executive officer, Dr Craig Barret, has been awarded the RDS Gold Medal for his contribution to Irish industry. Previous winners include former EU Commissioner Peter Sutherland and former Kerry Group chairman Dr Denis Brosnan. Dr Barrett will accept the award at a special gala dinner today in the RDS.
