Intel is now making more than half of its PC and server microprocessors using 65-nanometer technology.

The company made the announcement at the opening of a chip fabrication plant in Ireland. It is one of three Intel factories around the world using the 65nm technology, which enables the production of smaller, faster, less power-hungry chips compared to those manufactured using older technologies. The 65nm figure is a measure of the average size of features on the chip. One nanometre is one-billionth of a meter.

Much of the industry is moving toward this technology, but Intel was ahead of the pack in producing the microprocessors in large quantities, and the $US2 billion plant, located in the countryside outside of Dublin, was now operating at high volume, Intel executives said.

Intel would continue to invest heavily in the latest technologies, and in building new plants, an executive said.

"The cost of not enough capacity is enormously greater than too of much capacity," vice-president of sales and marketing, and general manager of Europe, Middle East and Africa for Intel, Gordon Graylish, said.

Intel has operated in Ireland since 1989, and announced its plan to build the new plant there in 2004, amid controversy. At the time, the European Commission objected to incentives that the Irish government offered Intel to locate the plant in Ireland. Since then, Intel has chosen Israel and the US to build cutting-edge manufacturing facilities.

"It's important that Europe competes for investments like this," CEO of Industrial Development Agency Ireland, a government body that encourages foreign investment in Ireland, Sean Dorgan, said. However, he warned that trying to regulate competition for investment between European countries could drive investors to look outside the European Union for a better deal.

Taiwanese contract chip maker, United Microelectronics, said this week it was also making chips with 65nm technology. It has already produced chips for two customers, and expected to be making them for 10 customers by the end of the third quarter.