Intel is sinking €5 billion ($5.7 billion) into its Irish semiconductor plant even as its chipmaking division bleeds $2.4 billion in quarterly operating losses. It's a bet that surging AI demand for server processors can turn around its foundry business.
The investment at the Leixlip campus near Dublin, announced Monday, will upgrade existing fabrication facilities and install leading-edge manufacturing equipment to crank out more Xeon 6 processors built on Intel's 3-nanometer node. The company said the work began earlier this year and will wrap up in 2027.
"This €5 billion investment represents a definitive commitment to increase capacity at our Leixlip campus and increase what we can deliver to Intel Foundry customers," Naga Chandrasekaran, Intel Foundry's executive vice president and general manager, said in a statement.
The expansion targets a specific bottleneck. Cloud hyperscalers and server operators are buying every available AMD Epyc and Intel Xeon processor as AI agents drive CPU demand, according to Heise Online.
Intel is redirecting production from desktop and notebook lines to keep up. Chandrasekaran told reporters that demand for servers and AI is driving an increase in the need for Intel 3 wafers.
Intel isn't building new cleanrooms. Instead, it's upgrading existing ones with new lithography systems and expanding the automated track system that connects campus modules into a unified production line. The goal is maximizing output from the physical space Intel already has.
The majority of the spending will hit by the end of 2027 and represents roughly 30% of Intel's planned $17 billion capital expenditure for 2026, Chandrasekaran said. The project is expected to engage around 2,000 specialized tradespeople and add several hundred permanent high-tech jobs to Intel's 4,900-person Irish workforce.
Ireland has been Intel's European manufacturing base since 1989, with total investment topping €30 billion. More than half of that came between 2019 and 2023, when the company doubled capacity at the site. In 2024, Intel sold 49% of the Irish plant for $11.2 billion to raise cash during a downturn, then bought back all shares earlier this year for $14.2 billion.
The foundry division's $2.4 billion first-quarter operating loss highlights the pressure Intel faces as it tries to reclaim manufacturing leadership from TSMC and Samsung. But Intel as a whole could return to profitability this year, the company's forecast suggests.
End customers won't see relief soon. The processor shortage is more acute than the memory shortage, and both Intel and AMD have shifted all available capacity to server chips, leaving desktop and laptop supply constrained.
