DUBLIN, Ireland (AP) -- Intel Corp. announced a massive $2 billion expansion to its plant in Ireland for manufacturing a new generation of ultra-fast microprocessors.

Intel, the world's largest chipmaker headquartered in Santa Clara, Calif., said it planned to build a 60,000 square-foot facility for manufacturing its next planned chip line, called Fab 24-2. Construction will begin immediately and production of the new chips in early 2006, the company said.

"This additional investment in the factory will help ensure that we have leading-edge manufacturing capacity to meet customer needs in 2006," said Bob Baker, Intel's senior vice president of its technology manufacturing group. "The performance of our workforce in Ireland and our relationship with the government helped make this investment decision possible."

Intel has been expanding rapidly in Ireland since establishing operations here in 1989. Its campus in the west Dublin suburb of Leixlip already employs more than 4,500 people, making it the largest Intel operation outside the United States and its only manufacturing base in Europe.

The government's Investment and Development Agency said it had provided a confidential amount of financial support and other incentives to Intel to secure its latest expansion. It said this aid would require European Union approval.

"Ireland faced stiff competition from several locations for this investment," said Deputy Prime Minister Mary Harney. "The decision by Intel to commence this new phase of investment in its Irish operations confirms Ireland's position as a world-class technology location and one of Europe's top locations for semiconductor innovation and manufacturing."

Over the past decade, a number of high-tech multinationals have been wooed to Ireland, citing the country's highly educated, English-speaking work force, good connections between companies and universities, involvement in the European Union and its euro common currency, and a low corporate tax rate of 12.5 percent. Unemployment in Ireland now stands at 4.4 percent, near a historic low.