Europe risks losing its industrial base of semiconductor chipmakers if it fails to bring down steep energy costs facing the sector, Taoiseach Micheál Martin warned European Commission president Ursula von der Leyen earlier this year.
The Government said there was a need for “interim measures” to be taken at EU level, to lift some of the pressure high energy costs were putting on chip producers such as Intel, in a letter to the head of the EU’s executive body.
The March 31st letter to Ms von der Leyen, seen by The Irish Times, said the EU must help chip manufacturers stay economically competitive in Europe, or companies might pause future investment plans and decide to build new plants elsewhere.
Ms von der Leyen responded in June, agreeing that efforts to boost Europe’s semiconductor industry would work only if the continent’s “energy challenges” were addressed.
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US chipmaker Intel has a large presence in the Republic, employing almost 5,000 people at a major plant in Leixlip, Co Kildare, which is its largest manufacturing facility outside the US.
The company has been struggling through a painful restructuring after falling behind Nvidia and other semiconductor giants that have so far dominated the artificial intelligence (AI) race.
During discussions with Mr Martin and other Government figures in recent months, Intel has repeatedly complained about the high electricity costs it faces in Ireland.
Mr Martin appealed to the European Commission president to keep semiconductor manufacturers in mind as the EU attempts to pivot towards more environmentally-friendly energy sources.
In the correspondence, Mr Martin said the sector used a lot of energy to produce semiconductor chips, and companies in Ireland were reporting “very high electricity costs” compared to other parts of the world.
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“You will be aware that energy prices in the EU remain relatively high when compared to competing economies,” he told Ms von der Leyen.
Plans to transition European economies to green energy would take time, meaning companies would be facing higher electricity costs “for some years to come”, Mr Martin said. As such, the EU would need to “consider interim measures to address this particular challenge”, he wrote.
The letter, which was also signed by Minister for Enterprise Peter Burke, said it was “imperative” that Ireland and the European Commission worked on measures to help chipmakers “remain globally competitive across the union”.
Failing to do so would risk “losing the base that we currently have and would be to the detriment of developing and/or attracting further manufacturing to the EU,” the letter said.
Semiconductor manufacturing is seen as a strategically crucial sector, where Europe, the US and China are in competition to expand their respective supplies of the computer chips.
Recent years have seen an intense global race to attract and support companies developing cutting edge processors used to power the most advanced AI technology.
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The Government is hoping to lure a company – such as Nvidia or another big player – to the Republic, to build an advanced chip fabrication plant as part of a new strategy on semiconductors.
In a June 12th response to the Taoiseach, Ms von der Leyen said new EU legislation being brought forward would help energy-intensive industries make the switch from fossil fuels to clean energy.
“At the same time, besides energy costs, our broader competitiveness agenda also aims to foster innovation, simplify regulations, and streamline investment processes, creating an environment where European businesses, particularly SMEs, can thrive,” she wrote.
The correspondence was released to The Irish Times in response to a request under Freedom of Information laws.
