Ireland’s engineering sector is entering a decisive phase as artificial intelligence, data centres and electric vehicles reshape global demand for advanced electronics. KPMG’s September 2026 analysis says Ireland’s ability to attract and retain research activity will be central to sustaining its semiconductor position. For engineering executives, the issue is creating the infrastructure, incentives and talent needed to turn rising demand into durable industrial capability.

Ireland has a platform, but competition for engineering investment is intensifying. KPMG points to Singapore as a strong competitor, while Ireland retains advantages through its skilled workforce, established electronics ecosystem, location and capacity for major infrastructure. The National Semiconductor Strategy identifies more than 130 semiconductor companies and 20,000 jobs, while IDA Ireland highlights Ireland’s presence across the semiconductor value chain. The response should focus on three priorities: competitive R&D incentives, infrastructure for advanced manufacturing, and the skills and research capabilities required for scale.

The first priority is maintaining a compelling R&D environment. KPMG notes that the R&D Tax Credit increased from 30% to 35% following Budget 2026, potentially providing an effective tax benefit of up to 47.5% on qualifying expenditure when combined with the corporation tax deduction. The incentive matters because semiconductor engineering depends on sustained investment in design, testing and development. Support from Enterprise Ireland and IDA Ireland also provides routes for companies seeking investment and innovation assistance. Ireland should continue reviewing the system while keeping access clear enough for long-term investment decisions.

Infrastructure is the second test. KPMG cites potential for up to 34,500 additional semiconductor roles by 2040, making physical capacity increasingly important. The Government’s Next Generation Sites initiative includes three planned locations designed to provide large, pre-permitted sites for sectors including semiconductors. The Large Energy User Action Plan also addresses how energy-intensive industries can locate new demand alongside renewable energy resources. For engineering businesses, dependable power, utilities, planning certainty and expansion capacity can be as important as tax policy.

The third priority is building the ecosystem around R&D. Ireland launched I-C3 in 2026 to give semiconductor start-ups and SMEs access to funding pathways, training, design tools and pilot-line facilities. Meanwhile, the European Commission’s proposed Chips Act 2.0 seeks to support European chip production and reduce strategic dependencies. Singapore is also committing S$800 million (€508 million) to semiconductor R&D under its 2026 plans. These developments show that engineering competitiveness depends on collaboration between industry, academia and research infrastructure.

Ireland should maintain competitive R&D incentives, develop serviced sites with reliable energy and utilities, and deepen partnerships between engineering companies, universities and research centres. Companies can build talent pipelines through specialist training and joint research, while policymakers can simplify access to innovation funding and improve regional infrastructure. Ireland’s electronics engineering sector has a strong base, but global competition means this position cannot be treated as permanent. KPMG’s assessment highlights opportunities created by AI driven demand across semiconductor design, manufacturing and supporting technologies. Targeted investment, competitive R&D support and stronger links between infrastructure, talent and research can help Ireland build sustained engineering capability for the next generation of global electronics growth.