Almost all of $384m incentives to Intel outside US came from the Irish taxpayer last year

Intel’s $17bn investment in Kildare received significant financial support from the State

Irish taxpayers funded “substantially all” of the $384m in grants and tax credits received by tech giant Intel outside of the US last year, recently filed financial records show.

The figures revealed by Intel in its annual report provide an insight into the scale of incentives that global firms investing in Ireland receive from the State.

In 2023, Intel reported that it had recognised $645m worth of grants and tax credits outside the US, a “majority of which” related to the substantial expansion of its chip manufacturing facility in Leixlip, Co Kildare.

Intel said “substantially all and a majority” of the non-US grants and refundable tax credits recognized by the chip giant last year were related to the expansion of its Irish facilities.

Intel’s $17bn investment in the Kildare facility was one of the most substantial investments ever made in the State.

Intel, which has operated in Ireland for over 35 years, records government incentives like cash grants and refundable tax credits when it believes there is a “reasonable assurance” they will be received.

A spokeswoman for Intel said the company had contributed over €3.73bn to the Irish economy in 2023 alone. She added that “initiatives such as the R&D tax credit and grants create a competitive advantage for multinational and indigenous companies in Ireland undertaking leading edge research, development and technology activities” in the country.

Intel first revealed plans to invest $17bn in its Leixlip campus in 2022, with the plant employing 1,600 new staff once fully operational.

At the time, the investment would have brought Intel’s total employment in Ireland to 6,500.

Last June, private equity powerhouse Apollo paid $11bn to buy a 49pc stake in a vehicle connected to Intel’s Fab 34 in Leixlip. The deal allowed Intel to unlock cash to reinvest in its business as it plays catch-up with rivals such as Nvidia.

The deal has since taken a twist after Intel revealed it may have to pay Apollo up to $1.1bn in damages for missing certain milestones at the new Fab 34 facility. The company has already recognised a potential $755m charge related to the expected damages in its annual report, describing the delays as self-imposed and resulting from a decision to curtail near-term capacity requirements.

A spokeswoman for Intel said it reflected “an adjustment in our planned capacity ramp in Ireland.”

“In Q2, we began the process of resizing our expense structure to support more modest long-term growth, including adjusting our capacity plans to more conservative levels, driving impairments in Q3 and this accrual in Q4,” she said.

The construction of Fab 34 is completed, Intel added, with manufacturing underway at the site . Under the agreement with Apollo, Intel retains ownership of Fab 34. Intel also has another manufacturing facility in Leixlip, Fab 24.

According to recent financial results, Intel’s revenue was down 7pc to $14.3bn in its fourth quarter. It was the first earnings report since Pat Gelsinger was ousted as CEO in December .

The quarterly net loss of $126m pushed Intel’s net loss up to $18.8bn for the year. Intel had posted a profit of $1.7bn in 2023.

Competition for inward investment, especially in the highly lucrative chips sector, has been heating up.

Last year, Technology Ireland, which represents Intel, Amazon, Google and other tech giants, urged the State to introduce a “comprehensive and competitive incentive program” to become a leader in the sector and “retain employment”.

Reporting on:independent.ie