{"slug": "r-d-landscape-for-electronic-engineering-companies-in-ireland", "title": "R&D Landscape for Electronic Engineering Companies in Ireland", "summary": "KPMG's report 'Silicon Isle' projects that Ireland could support up to 34,500 new semiconductor roles by 2040, driven by surging global demand for AI, data centres, and electric vehicles. The country's R&D tax credit increased from 30% to 35% in Budget 2026, delivering an effective tax benefit of up to 47.5% on qualifying R&D spend, as outlined by KPMG's Sean Vincent and Stephen Brennan.", "body_md": "[Ireland](https://irishtechnews.ie/?s=Ireland) is a major player in the European electronics space with over 20,000 people employed and host to 15 of the world’s largest 30 semiconductor companies. Global semiconductor demand has surged in recent years with the emergence and increased focus on artificial intelligence (AI), data centres and electric vehicles (EVs). With this increased demand comes a national semiconductor strategy which aims to create high-value jobs, secure long-term investment, and cement Ireland’s role as a critical player in Europe’s semiconductor future.\n\nSean Vincent, Scientific Consultant, Tax, and Stephen Brennan, Associate Director, Tax, at KPMG outline how with the correct investment and development, the electronic engineering sector has the opportunity to thrive and continue growing in Ireland.\n\nKPMG’s report Silicon Isle – KPMG showed that by 2040, Ireland could support up to 34,500 new semiconductor roles. Against a backdrop of accelerating global demand for advanced electronics and intensifying competition for research and development (R&D) investment, Ireland’s ability to sustain and expand its position in the semiconductor and electronics space will hinge on its capacity to attract, support and retain R&D activity.\n\n## Ireland’s Semiconductor Industry\n\nR&D in the semiconductor industry is typically carried out by three distinct types of companies, each playing a critical role in the value chain.\n\n- Fabless companies focus exclusively on chip design, outsourcing manufacturing to specialised foundries (e.g. NVIDIA).\n- Integrated Device Manufacturers (IDMs), by contrast, manage both the design and fabrication of chips in-house, combining innovation with large-scale manufacturing capabilities (e.g. Intel).\n- Finally, Electronic Design Automation (EDA) companies provide the sophisticated software tools required for chip design and verification (e.g. Synopsys).\n\nAttracting these types of companies to Ireland is imperative to yield high growth and continue to put Ireland at the forefront of electronics R&D in Europe and worldwide.\n\n## AI-Driven Supply Constraints and Shortages\n\nThe global semiconductor industry saw an unprecedented component shortage during the Covid-19 pandemic (2020-2023) as a result of disrupted fabs and logistics, and a surge in demand for consumer electronics due to remote working. However, as AI continues to boom, we see pressure being put on the supply of various components for AI usage, such as graphics processing units (GPUs) for data centres, high bandwidth memory for large language models (LLMs), and AI accelerators.\n\nIt’s not just GPUs that are in demand, with the AI industry shifting from building chatbots to autonomous AI agents, demand for Memory (RAM) and CPUs (Central Processing Units) surged through the second half of 2025 and has continued into 2026. With this increased demand for new and improved electronic components, Ireland is in a unique position to capitalise on Europe’s chip production ambitions.\n\n## Incentives Stack\n\nTo remain competitive in an increasingly volatile semiconductor and electronics market, Ireland has continued to strengthen its R&D incentive framework. At the core of this framework is the R&D Tax Credit, which, following Budget 2026, increased from 30% to 35% on qualifying R&D expenditure. When combined with the standard 12.5% corporation tax deduction, this delivers an effective tax benefit of up to 47.5% on qualifying R&D spend. The credit is fully refundable over a three-year period, but potentially shorter for smaller claims.\n\nDirect funding support further enhances the attractiveness of the Irish ecosystem. Both IDA Ireland and Enterprise Ireland provide grant assistance for qualifying R&D projects, with the exact quantum of grant support being project-specific and can depend on factors like company size, project scale, and location. Capital investment in R&D infrastructure is also supported, with expenditure on buildings used for R&D activities eligible for additional RDTC relief where a minimum level of R&D usage is met.\n\nRegional policy measures add a further dimension to Ireland’s incentive offering. Companies locating R&D activities in the Border, Midland and Western (BMW) region may access enhanced grant rates and supplementary supports under EU regional aid frameworks. For example, companies locating in the BMW region can also (i.e. in addition to R&D Grants and RDTCs) receive capital and employment grants.\n\nAltogether, Ireland’s R&D Tax Credit, IP-focused tax regimes, grant funding, capital allowances and regional incentives form a comprehensive and generous incentive stack that significantly strengthens the appeal of undertaking electronic engineering R&D in Ireland, while supporting the country’s ambition to remain a leading European hub for semiconductor and electronics investment.\n\n## International Competition\n\nWhile Ireland has long been recognised for having one of the world’s best R&D tax regimes, they face stiff competition from countries around the globe. Singapore, for example, is known for having some of the most aggressive R&D incentives and poses a threat to Ireland for direct foreign investment in the electronics space.\n\nWhile Singapore offers competitive R&D incentives, Ireland benefits by having an advantageous geographical location with links to Europe and North America, a highly skilled workforce, and a long- and well-established track record in the electronics industry. In addition, Ireland’s physical scale, regional flexibility and benefits can provide structural advantages for larger electronic engineering investments.\n\nIreland is strongly positioned to accommodate facilities with significant infrastructure, power and expansion requirements, including pilot manufacturing lines, advanced packaging operations and semiconductor fabrication. Ireland has demonstrated its ability to accommodate very large semiconductor manufacturing campuses, most notably Intel’s Fab 34 in Leixlip. This capacity for long-term scaling is increasingly relevant as companies seek investments amid growing demand driven by AI, data centres and EVs.\n\nAs well as this, the Department of Enterprise, Tourism and Employment recently announced Ireland’s National Competence Centre in Semiconductors (I-C3) which is designed to support startups and SMEs by opening access to essential resources such as funding pathways, specialist training, design tools and pilot line facilities. The initiative aims to empower Ireland’s semiconductor startups and SMEs through practical access to design, production, funding and training, driving innovation and sectoral growth.\n\n## The Future of R&D\n\nLooking ahead, the Irish Government has set out a clear policy direction for the continued evolution of Ireland’s R&D incentives and innovation supports. While not a list of firm commitments, the Research and Development Tax Credit and Innovation Compass (published 16th February 2026) signal the areas that the Department of Finance considers most important for further examination in the short to medium term to ensure Ireland remains competitive and aligned with international developments. In particular, it highlights further review of qualifying and capital expenditure, administrative simplification, and the potential evolution of innovation-focused supports.\n\nWith electronics demand continuing to surge, it is important that Ireland reinforces its position as a leading location for electronic engineering R&D and investment. Increased competition to capitalise on the AI-driven expansion of the electronics sector means Ireland must continue to refine and strengthen its R&D and innovation incentives, ensuring it remains an attractive destination for R&D activity in an increasingly competitive global landscape.\n\n## Get in touch\n\nFor more insights or if you have an R&D-related query, visit KPMG’s R&D Incentives practice at [kpmg.ie](https://bit.ly/4feZ5bV)\n\n```\nMore about Irish Tech News\nIrish Tech News are Ireland’s No. 1 Online Tech Publication and often Ireland’s No.1 Tech Podcast too.\nYou can find hundreds of fantastic previous episodes and subscribe using whatever platform you like via our Anchor.fm page here: https://anchor.fm/irish-tech-news\nIf you’d like to be featured in an upcoming Podcast email us at [email protected] now to discuss.\nIrish Tech News have a range of services available to help promote your business. Why not drop us a line at [email protected] now to find out more about how we can help you reach our audience.\nYou can also find and follow us on Twitter, LinkedIn, Facebook, Instagram, TikTok and Snapchat.\n```\n\n", "url": "https://wpnews.pro/news/r-d-landscape-for-electronic-engineering-companies-in-ireland", "canonical_source": "https://irishtechnews.ie/rd-landscape-for-electronic-engineering-companies/", "published_at": "2026-07-22 13:00:30+00:00", "updated_at": "2026-07-22 13:27:37.963749+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-policy", "ai-infrastructure", "ai-chips"], "entities": ["KPMG", "Sean Vincent", "Stephen Brennan", "IDA Ireland", "Enterprise Ireland", "NVIDIA", "Intel", "Synopsys"], "alternates": {"html": "https://wpnews.pro/news/r-d-landscape-for-electronic-engineering-companies-in-ireland", "markdown": "https://wpnews.pro/news/r-d-landscape-for-electronic-engineering-companies-in-ireland.md", "text": "https://wpnews.pro/news/r-d-landscape-for-electronic-engineering-companies-in-ireland.txt", "jsonld": "https://wpnews.pro/news/r-d-landscape-for-electronic-engineering-companies-in-ireland.jsonld"}}