The Taoiseach has warned of the threat to the economy posed by the US economic slowdown as Ireland's flagship technology investor Intel announced the shedding of some 170 jobs.
In the clearest acknowledgment yet of Government concern over recent poor performances by global technology companies, Mr Ahern said yesterday the sector was entering "a dodgy period".
While Intel was shedding 5 per cent of its workforce worldwide, its Irish operation was in an extremely healthy position compared with some in other countries, he said.
Some 170 of the 3,400 jobs at the plant are expected to go, with the company saying it cannot rule out further shrinkage.
Intel manufacturers computer chips which power a range of electronic devices, and its business is closely aligned with firms such as Dell and Gateway which have already reduced their workforces in the Republic this year.
Mr Ahern said there had been a downturn in the technology sector for three quarters in a row, and this was bound to have an effect in Ireland.
The Taoiseach insisted that the Irish economy was still holding up in a difficult situation.
Speaking to reporters before a speech to Brazilian business people, he said skills shortages in the economy remained, and growth was still very high.
But he warned that Ireland must continually seek new markets for exports, such as the major countries in South America.
This would offset the effects on the State of any downturn elsewhere.
In a speech to the Federation of Industries of the State of Sao Paolo which was mainly devoted to explaining Ireland's huge economic growth, he sounded "a little note of caution" arising from the US slowdown.
"So far, I'm pleased to say, we haven't been seriously affected, but we are aware of the need to remain vigilant to the possible threats to our economy if the slowdown in the US is sustained," he said.
He told reporters that technology companies were entering "a dodgy period", citing this week's global results from Intel. "I'd be worried," he said.
However, he stressed that despite the new caution in the technology sector, there was no need to reverse the policy of seeking workers from abroad to meet skills shortages.
While Ireland's growth rate might fall to 6.5 per cent this year, "that will still probably be three times bigger than anywhere else in the modern world".
The Minister for Finance, Mr McCreevy, echoed the Taoiseach's comments on the State's growth rate. Speaking at the publication of the National Treasury Management Agency's annual report yesterday, he said that even if GDP growth slowed to 6 or 7 per cent, it would still be up to four times the EU average.
Jamie Smyth, Technology Reporter, adds: The job losses at Intel follow the introduction of a range of cost-cutting measures designed to maintain profits amid a global slump in demand for computer chips.
Intel halted construction of a $2 billion extension to the Leixlip plant last March and has offered its staff the opportunity to take two weeks' additional unpaid leave.
The company has also confirmed that its six-monthly staff bonus will be halved and that it had considered a temporary closure of up to three weeks for its Leixlip plant.