Why Intel is Investing €5bn in European Chip Manufacturing

Intel has announced plans to invest €5bn (US$5.7bn) into its Leixlip base in Ireland.

The company says this expansion will bring key upgrades to the site’s fabrication facilities, automated track systems and state-of-the-art manufacturing technologies.

Naga Chandrasekaran, EVP, Chief Technology and Operations Officer and General Manager of Intel Foundry says: “We are ensuring that Ireland remains at the forefront of the world’s most advanced manufacturing ecosystems, while strengthening the region’s role in the global technology landscape.”

This investment in Ireland is the largest single foundry commitment Intel has made in Europe. The Lexlip campus is already its biggest outside of the US.

AI demand and manufacturing priorities

Semiconductors and data centre infrastructure are seeing a huge spike in demand as AI grows.

According to a 2026 McKinsey report, global semiconductor demand is projected to reach around €1tn (US$1.14tn) by 2030.

Intel’s expansion in Ireland aims to ramp up production of its Intel 3 process node.

This 3nm-class technology uses extreme ultraviolet (EUV) lithography and advanced FinFET transistors to deliver higher performance and better power efficiency for next-generation computing.

European semiconductor supply

Alongside improved production quality, Intel’s investment is looking to address some semiconductor supply issues in Europe.

In January 2026, Oxford Economics predicted that supply-demand imbalance in the AI semiconductor market will continue for several years.

The firm previously predicted that Europe’s share of the semiconductor market will increase to 20% by 2030.

Intel’s Leixlip site is the only facility in the continent that makes the Intel 3 process node needed for its Xeon 6 server processors. 

Demand for these servers has risen as AI data centres require powerful CPUs to orchestrate and support heavy workloads.

This increased interest can be seen in Intel’s Q1 2026 performance, as its Data Center and AI business unit saw a 22% improvement from the previous year.

Europe’s role in semiconductor manufacturing 

In September 2023, the European Chips Act entered into force. It aims to double the European Union’s global semiconductor share to 20% by 2030.

Backed by an initial €43bn (US$49.1bn) in planned investments, the initiative was a direct response to COVID-19 supply chain vulnerabilities caused by factory closures in China and Taiwan.

The Act funds research centres, allows member countries to give subsidies and tracks the market to spot supply issues early. 

In 2024, a European Commission report revealed that EU-based production accounted for just 22% of the continent’s overall chip usage.

A second version of the Act was proposed in June 2026, which would add a further €120bn (US$129.15bn) to the initiative if adopted. 

Infineon opened its Smart Power Fab in Dresden in July 2026 and this €5bn (US$5.7bn) investment included €1bn (US$1.14bn) from the European Chips Act.