Ireland misses out on wave of Intel investment

26 Jul 2005

Ireland has failed to attract a new US$3bn investment by Intel in a chip fabrication plant, instead losing out to Arizona. A second US$150m investment to convert an existing fabrication plant for new microprocessors went to New Mexico.

It emerged in June that Ireland was competing against Israel and locations in the US for the Fab 32 facility, which will now begin production of leading-edge microprocessors in the second half of 2007 on 45 nanometer process technology. Construction of the facility in Arizona is expected to begin immediately.

Ireland’s failure to win the prestigious project follows a recent controversy over the Government’s recent unsuccessful bid to gain EU approval to pay Intel €100m in grants towards the construction of its Fab 24-2 in Leixlip, Co Kildare, which is due to begin production early next year. It is unclear whether this controversy undermined its chances of attracting new investment. Intel has three fully operational wafer fabrication plants running at its Leixlip site.

When completed, Fab 32 designated for Arizona will become Intel’s sixth 300mm wafer facility. The structure will be about one million square feet with 184,000 square feet of cleanroom space. The project will create up to 1,000 new Intel jobs at the Arizona site over the next several years. During the construction phase, more than 3,000 skilled trades people will be hired to work on the project.

“This investment positions our manufacturing network for future growth to support our platform initiatives and will give us additional supply flexibility across a range of products,” said Paul Otellini, Intel’s CEO. “For Intel, manufacturing is a key competitive advantage that serves as the underpinning for our business and allows us to provide customers with leading-edge products in high volume. The unmatched scope and scale of our investments in manufacturing help Intel maintain industry leadership and drive innovation.”

Intel currently operates four 300mm fabs that provide the equivalent manufacturing capacity of about eight 200mm factories. Those factories are located in Oregon, Ireland and New Mexico. The company also has an additional 300mm fab currently under construction in Arizona (Fab 12) scheduled to begin operations later this year and one expansion in Ireland (Fab 24-2) scheduled to begin operations in the first quarter of next year.

Manufacturing with 300mm wafers (about 12 inches in diameter) dramatically increases the ability to produce semiconductors at a lower cost compared with more widely used 200mm (eight-inch) wafers. The total silicon surface area of a 300mm wafer is 225pc, or more than twice that of a 200mm wafer, and the number of printed die (individual computer chips) is increased to 240pc. The bigger wafers lower the production cost per chip while diminishing overall use of resources. 300mm wafer manufacturing will use 40pc less energy and water per chip than a 200mm wafer factory.

Separately, Intel said it will invest US$105m to convert an existing inactive wafer fab in New Mexico to a component temporary test facility. The project will provide additional test capacity to the company’s factory network for the next two years and will result in an additional 300 jobs at the New Mexico site during that period.

By John Kennedy