Ireland is competing for a €2 billion investment from US chip-maker Intel which is expected to be announced this year.
Intel Ireland, which employs 3,600 people at its campus in Leixlip, Co Kildare, confirmed yesterday that it had secured planning permission for a chip-making plant.
However, it is understood that Intel Ireland faces competition from Intel facilities in Israel and the US for the investment in the latest chip-making production technology. Construction of the new computer chip plant is expected to start early next year, and be completed within 18 to 24 months. It will manufacture microprocessors which act as the brains of PCs and other electronic devices.
Intel's Ocotillo campus in Arizona in the US has also applied for planning permission to build the plant, which would employ up to 500 skilled workers.
Intel Ireland may also have to compete against existing Intel plants that could be converted to make the latest generation of microchips.
According to planning documents seen by The Irish Times, the proposed new wafer fabrication plant would consist of a two-storey building attached to the firm's latest factory, which is called Fab 24.2.
It would house a 16,638sq m production floor, a 20,178sq m basement and multistorey car parks for 1,900 cars.
Kildare County Council has granted permission for the plant subject to 31 conditions during construction.
These conditions relate to the monitoring of noise, preventing pollution and making sure that existing roads can cope with new traffic.
An Intel spokeswoman said the firm's Irish management was examining ways to expand its existing plant in Leixlip.
However, she could not confirm or deny if the Intel group was preparing to make an announcement on the construction of a new Irish wafer fabrication plant.
Intel has three fully operational wafer fabrication plants running at its Leixlip site. It also has a new chip-making plant called Fab 24.2 under construction. This is expected to be completed by early next year.
It is unclear if the Government's recent failure to gain EU approval to pay Intel €100 million in grants towards the construction of Fab 24.2 will undermine its chances of attracting new investment.
In February the Government withdrew its grant aid proposal after receiving indications that the aid was illegal.
The European Commission justified its opposition to the Government's aid plan on the basis that it would create no new jobs, would not involve any technology transfer and would reinforce Intel's already dominant position in the European microchip market.
However, an IDA Ireland spokeswoman said the agency was always willing to work with companies that were willing to invest in the Republic.
She said the offer of new grant aid for a future Intel project had not been ruled out.
Grant aid is just one of a number of factors, such as access to skilled workers and corporate tax rates, which determine the best location for chip-making plants.