Intel's remarkable comeback: What it means for Ireland and its Leixlip operations

Intel is experiencing a remarkable comeback, a turnaround story that few anticipated at the start of the year. Once considered a jewel in Ireland's multinational crown, employing nearly 5,000 people, the chipmaker seemed to have lost its luster. The prevailing narrative suggested its technology had fallen behind, and the company was losing ground to advanced competitors in artificial intelligence, particularly Taiwan Semiconductor Manufacturing Co. and Nvidia.

The implications for Intel's main Irish operation in Leixlip, Co. Kildare, were uncertain and at times bleak. Despite a visit from then-CEO Pat Gelsinger in September 2023, who had been brought back to revive the company's fortunes, his plan to focus on the foundry business, manufacturing chips for others as well as its own products, seemed to be faltering. Fab-34 in Leixlip, crucial for producing processors like Core Ultra and Xeon using extreme ultraviolet lithography, was seen by some as a consolation prize after Ireland missed out on a major €30 billion 'Silicon Junction' investment that went to Germany.

Adding to the unease, staff in Leixlip were asked to consider unpaid leave just a year prior due to slumping PC chip demand. In early 2023, Intel's share price plummeted after dismal earnings projections, while rival Nvidia surged past it with a $1 trillion valuation. Despite this, Gelsinger expressed optimism, stating, "We're going to build a lot of chips here."

However, the situation worsened. Apollo Global Management acquired a 49% stake in the Leixlip plant for $11 billion, followed by Intel announcing 17,000 global job cuts. Voluntary redundancies were discussed in Ireland, and the closure of its Shannon facility was confirmed. By the end of 2024, Intel's market valuation had dropped 60%, and Gelsinger had stepped down.

Fast forward to the present, and Intel appears to be in a much stronger position. Driven by the demand for artificial intelligence, analysts believe its balance sheet has been repaired by the new CEO, Lip-Bu Tan. The company's renewed focus on its foundry business and advancements in chip-making technology have positioned it for a significant resurgence, with its Irish operations remaining a vital component of its global strategy.

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We're going to build a lot of chips here.