How Intel’s recent difficulties have impacted its relationship with Ireland

Just five years ago, Intel was the world’s most valuable chipmaker. Yet, in a technology world now consumed by AI innovation and dominated by other companies, most notably Nvidia, its fortunes have changed drastically.

In recent times Intel’s shares have plummeted more than 50 per cent and its market capitalisation stands at about $102 billion. As well as losing ground to chip rivals, it is under pressure to sell off its loss-making manufacturing business.

Intel says it contributed €3.73 billion to the Irish economy in 2023 and was responsible for 0.7 per cent of overall GDP. As well as employing 4,900 people, it supports about 770 Irish suppliers with €284 million in annual expenditure.

Ireland has had a long, mutually beneficial relationship with the US giant. Here is how it has played out amid recent difficulties.

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2019 – After three decades in Ireland, construction begins on the €17 billion Fab 34 in Leixlip. The multi-year project would double the manufacturing capacity in Ireland, enabling the production of Intel 4 and Intel 3, the company’s most advanced process technologies.

July, 2022 – Demand for its PC chips cools off from pandemic highs. Intel lowers its full-year revenue forecast. Shares fall.

October, 2022 – The firm plans a major reduction in headcount. The company is battling a steep decline in product demand and is struggling to regain market share ceded to rivals. With pledges to slash costs, it looks at staff reductions and slower spending on new plants to net savings of $3 billion (€2.6 billion) by the following year.

December, 2022 – Staff in Kildare are told to consider taking unpaid leave amid a slowdown in demand for its products and 15 per cent drop in PC sales.

January, 2023 – About $8 billion is wiped off the company’s market value following dismal earnings projections and unease at the slump in the PC market. Revenue forecasts are $3 billion below estimates.

February, 2023 – Intel slashes its dividend payment to the lowest level in 16 years in an effort to preserve cash and focus on its turnaround. It says “improved financial flexibility will support the critical investments needed to execute Intel’s transformation during this period of macroeconomic uncertainty.”

May, 2023 – Nvidia becomes the first chipmaker to hit a $1 trillion valuation.

September, 2023 – Kildare’s Fab 34 facility opens. Intel chief executive Pat Gelsinger says its “critical chip” is the most advanced it has ever produced and will “enable AI everywhere”.

January, 2024 – The first batch of Intel’s most power-efficient processor, the Meteor Lake, to aid AI and machine learning capabilities are shipped in what is dubbed its “largest architectural shift in 40 years”.

March, 2024 – Competitor Nvidia unveils its latest more powerful artificial intelligence chips with eye on extending industry dominance.

June, 2024 – Apollo Global Management buys 49 per cent stake in Intel’s Leixlip plant for $11 billion.

August, 2024 – Intel moves to cut almost 17,000 jobs and suspend dividends as it attempts to restructure to compete artificial intelligence. The cuts are part of a $10 billion trim, but shares still fall 13 per cent. Management in Ireland begins consultations with staff on voluntary redundancies, understood to be open to about 4,000 people but with no specific target number.

September 2024 – Staff told of plans to close its facility at Shannon by late 2025, with the base for the firm’s operations moving to Leixlip.

November, 2024 – Company books a €17.2 billion set of restructuring and asset impairment charges in an attempt to rebuild competitiveness.

December, 2024 – As troubles continue to mount at the chipmaker, chief executive Pat Gelsinger says he will step down.

March, 2025 – Former board member and semiconductor veteran Lip-Bu Tan (65) is named as replacement chief executive in a bid to revitalise the ailing company. Shares jump more than 11 per cent.

April, 2025 – Intel agrees to sell its Altera chip unit to private equity group Silver Lake to raise cash. If follows a cost-cutting move in January which saw it separate Intel Capital into a new standalone fund.

April, 2025 – News emerges the company is to cut more than 20 per cent of staff globally.