COMPUTER CHIP maker Intel is to mothball one of its four Irish production facilities with the resulting loss of almost 300 jobs.
The closure of the facility will reduce employment at the technology giant’s operations in Leixlip, Co Kildare, to 4,200. At the peak of its operations more than 5,000 staff were employed there. The 294 compulsory redundancies follow 200 voluntary redudancies at the plant last February.
In a statement Intel said it was closing its Fab-14 factory due to a “reduction in demand” for the older products it produces. The Irish Times reported on Monday that jobs were at risk at Intel due to a fall in demand.
The US firm has entered into a 12-week consultation process with staff which will determine who will lose their jobs. As a result the first employees are not expected to depart until October.
Intel said that the same redundancy package will apply as was on offer in the voluntary programme earlier this year. That package equated to eight weeks’ salary for each year of service.
The Fab-14 factory opened in 1995 and in recent years was operating as a single unit with Fab-10 to produce lower end products such as flash memory.
In 2007 Intel hived off its flash memory business into a joint venture with STMicroelectronics but the Leixlip operations were not included in the deal, although it continued to supply the new venture.
Intel, the State’s largest private sector employer, has two other factories in Leixlip which produce newer 300mm wafers of microprocessors.
Intel’s Irish management has been lobbying corporate headquarters in California for new projects to be located in Leixlip which would justify renovating the older factories.
It had hoped production of Intel’s 1270 line of processors would be located at Fab 10 and Fab 14. It has now emerged that plants in Arizona and Israel will be fitted out for 1270 production before Ireland.
A spokesman for the firm said last night that Fab-14 would now be prepared for “possible future re-investment”.
Israel has been aggressively cutting corporation taxes and providing other incentives to attract firms such as Intel. In 2005, €100 million in proposed Irish State aid to Intel for its newest factory was blocked by the European Commission.
The Intel spokesman said the decision did not indicate that Intel had any intention of pulling out of Ireland. However the lack of any new investment has raised concerns for the approximately 450 staff that will remain in Fab-10.
The news came on the same day that the Government announced the creation of 300 jobs at technology firm Intune Networks. The firm’s technology is being used to build a next generation telecommunications network which it is hoped will attract further inward investment to the country.
The announcement was part of a larger strategy unveiled by Minister for Communications Eamon Ryan to create 30,000 technology-based jobs over the next decade.
Intel staff were briefed on the decision yesterday afternoon but were told not to speak to the media.
Since it opened an assembly operation in Leixlip in 1989 Intel has invested €6 billion in its Irish operations.
The investment has taken place in five main tranches with the last major investment coming in 2004.
Local Labour deputy Emmet Stagg said the importance of Intel to north Kildare and nationally could not be over-estimated. “This number of redundancies is certainly serious and there’s a knock-on [effect] in the outside economy for jobs as well.”
He pointed out that Hewlett-Packard, the other Leixlip-based multi-national, had recently announced the creation of new jobs “and hopefully some of the workers who are made redundant here might find some of the vacancies that have been created in Hewlett-Packard,” he said.