A sharp fall in students applying to study electronic engineering prompted the Republic's top microchip firms yesterday to warn of a future skills shortage in the industry.

The 25 per cent fall in CAO applications for the sector are the lowest in more than 10 years, as students turn to more traditional professions following the global IT downturn.

The decline is so severe that a group of leading employers in the sector are urging Leaving Cert maths and physics students to reconsider their career choice. Midas Ireland, which includes some of the State's largest microelectronic firms such as Intel, Analog Devices and Xilinx, emphasises job prospects in the sector remain good despite the doctom crash. Midas's positive prognosis is largely based on the major shift in the electronics industry in Ireland from low-cost manufacturing to the research and development arena, which is less exposed to market cycles.

The organisation points to Intel's recent announcement of an €18 million investment in a research operation at Shannon to design and develop communication processor chips.

Midas argues that this investment is a strong vote of confidence in the Republic's highcalibre technology workers.

And as tech stocks continue to lead the current upswing in global stockmarkets, employers here hope this year's dramatic drop in applications for technology courses are merely a blip rather than a long-term trend.

Mr Noel Murphy, silicon engineering manager for Intel Communications Europe, said: "The fall in CAO applications may just be a blip but I think that parents have a lot of say in students' college choices and the perception is that the industry is very volatile.

"But parents and students should realise that, in the long-term, the predictions for the industry are extremely good. So the earning prospects of honours graduates remain attractive although the employment levels are not as high at the moment as they were earlier."

He also stressed that Ireland's position as a hotbed for research was under increasing threat from countries such as India, which churn out an increasing number of technology graduates every year.

Prof Peter Kennedy, head of the Department of Microelectronics Engineering at University College Cork and a member of Midas, urged students not to be put off by the intellectual demands of a career in electronic engineering.