Intel's decision to go ahead with a new computer chip fabrication facility at Leixlip, Co Kildare, is a significant boost for the economy. The statistics are impressive in themselves - $2 billion in investment, 1,500 jobs during the construction phase and 1,000 permanent jobs when in operation.
However the strategic importance of the move is also considerable, as the major US chip manufacturer chooses Ireland as a location for manufacturing a new era of microprocessors. It is a flagship decision which copperfastens Intel's presence in the Republic and should encourage other high-technology companies to invest here.
Intel - in common with the entire high technology sector - is coming out of a dreadful period. It has shed 5,000 jobs over the past year and is abandoning some more fanciful expansion plans hatched during the technology boom. It also had to put the construction of the new plan in Leixlip on hold. Now, its decision to proceed with the new "Fab 24" facility signals a return to its core business of producing microprocessors and is an important signal of its confidence that demand will be there for a new range of products designed for an era of mobile, multi-purpose computers.
Microprocessor demand slumped last year, due to a sharp fall in demand for computers. Intel is now confident that demand will start to recover and that by the time Fab 24 comes on line in 2004 the market will be reasonably buoyant. If this judgement proves correct, then it may signal the start of a more general recovery in the technology sector.
Intel's decision to locate the new plant here, rather than at one of its other international locations, is encouraging. As with all major multinationals, Intel will have assessed the pros and cons of a range of locations. Above all else, its decision to invest further in Leixlip indicates that it believes enough skilled graduates will be available to take up the new jobs it is offering. Ironically, the difficulties faced by the technology sector over the past year have lessened the pressures on the jobs market; at the height of the tech boom, it was becoming very difficult for many companies in the sector to find people to work for them.
It would be a mistake to expect the tech sector to return to the kind of heady growth rates seen in the late 1990s. However the worst for the sector may be over, as the shake-out over the past year leaves supply more aligned with demand. With signs now that the US economy is recovering, there is reason for some optimism about economic prospects here, even if the period of boom-time growth rates is now over.