Last week, Intel said it is separating the production of memory chips from other processors, in a move widely seen as preparation to spin off into the memory manufacturing business.

Three chip plants and two test and assembly facilities have been split from the manufacturing group and assigned to their own group.

One of those chip plants is at the company's Leixlip complex. A spokesman confirmed part of the operations at the older 200mm manufacturing Fab plant will now report to the new group. He said that facility employed roughly 1,000 people. Intel employs over 5,600 people in Ireland.

He added that the reason for splitting off the memory division was an effort to generate efficiencies in the unit.

The memory division makes semi-conductors to store programs on devices such as mobile phones and DVD players, and may be worth about $2bn after posting operating losses totalling $455m in the past three years.

Intel chief executive Paul Otellini last month announced a 90-day review of operations with a view to slashing $1bn in costs.

"They are separating it so that they can then spin it out in an initial public offering or sale, " said Doug Freedman, a San Francisco-based analyst with American Technology Research.

Shedding the division would mark a setback to Intel's ambitions to broaden business beyond personal computers. In the 1990s, flash memory chips became one of the few areas where Intel led a market not related to PCs. Profit waned as rivals entered and Intel missed demand for a new type of chip which it didn't make.