Industrial LocationThe main factors to consider are:

● labour supply

● access to a large market

● supply of raw materials and other resources

● government policies

We will look at the location of Intel, which is a huge multi-national microchip

manufacturer headquartered in California. Microchips are used in all kinds of IT devices

including PCs, mobile devices etc. Their plant in Ireland is in Leixlip, Co. Kildare. The plant was opened in 1989 and was Intel’s first manufacturing plant outside the USA. It was opened in Ireland for a number of reasons, the main ones being:

● access to European markets● relatively cheap and well educated workforce● government policy in relation to tax and grant aid● local infrastructure in Kildare

The plant in Ireland employs 4500 people and has two factories based on 360 acres, which makes it ideal for further expansion. Intel has invested over 6 billion euros here and the microchips manufactured here include Intel Core and Intel Celeron. Intel exports 2 billion euros worth of microchips from Ireland every year. The company dominates the market for microprocessors used in PCs and mobile

devices (above 80% market share). As well as plants in the USA (Oregon) and Ireland, Intel has manufacturing plants in Israel and China.

1

Access to marketsThe European market, along with North America and East Asia are the richest on the

planet. Intel wanted to be closer to the large and wealthy European market and

therefore in 1989, it choose Ireland as it’s European base. Locating in Ireland gives it

access to a European market of 500 million consumers. In addition, many of the

companies that Intel supplies, e.g. Dell, Apple, Sony etc have manufacturing plants in Ireland or Europe. HP, one of Intel’s biggest customers have a plant in Leixlip. Having a base in Ireland gives Intel customs free access to the European market as Ireland is a member of the EU. The plant is Leixlip is located beside

a motorway, which connects to Dublin airport and Dublin port from where the

microchips are exported.

labour supplyIntel located in Leixlip near Dublin so that they could access a skilled and highly

educated workforce. Microchip manufacturing is a highly skilled process that cannot be re located to low cost locations such as India. Even a speck of dust

could ruin the manufacture of a batch of micro-chips, so for this reason workers operate

in a 100% clean environment. The majority of intel employees have 3rd level qualifications in IT and engineering. Being close to Dublin means a good supply of third level graduates from UCD, Trinity etc. Ireland’s workforce is young (40% under 25), educated and English speaking. Ireland’s labour laws are flexible.

Government policiesIreland has one of the lowest corporation tax rates in the EU - 12.5%. This has been

a major factor in attracting MNC investment to Ireland, e.g. Google, Microsoft, HP,

Johnson and Johnson. The UK rate is 26% and the rate in Germany is 40%.

2

Resources / InfrastructureIntel choose Leixlip as there was a major investment in the water supply network in this area. Water is a major requirement for microchip manufacture as even minute amounts of dust can interfere with the manufacturing process. Intel is

based in large site, which can accommodate the large factories required for this kind

of manufacturing. In addition, shortly after Intel arrived, the main road was upgraded to motorway standard (M4). Leixlip is a suburb of Dublin with a population of 100,000, which makes it an attractive place to live for employees.

3

4