Intel gives investor big stake in Ireland fab with $11B infusion
As Intel Corp. nears completion of its new manufacturing facility in Ireland, it has received help in the form of a major financing investment.
Intel (Nasdaq: INTC) announced on Tuesday that Apollo Global Management will provide $11 billion and get a 49% stake in the chipmaker’s Fab 34 in Ireland.
The news came just a day after Intel announced its next generation of Xeon 6 server processors — which itself came soon after rival Advanced Micro Devices, Inc. publicized its new artificial intelligence chips for data centers as well as its new accelerated release cycle to bring new AI-enabled products to market.
Despite the news, Intel’s stock stayed basically flat on Wall Street. Its share price closed the day Tuesday down 0.86% at $30.03, and then in after-hours trading was up 0.80% on Tuesday evening.
Intel said it has so far invested $18.4 billion in the fab in Ireland, where the chipmaker began manufacturing chips on its Intel 4 process last September. The company said the facility was “largely complete.”
With its stock down 40% this year, Intel — one of Arizona’s largest employers with more than 12,000 workers in the state — called the Apollo deal a way “to unlock and redeploy to other parts of its business a portion of this investment while continuing the build-out of Fab 34.”
Intel did a similar deal in August 2022 with Brookfield Asset Management to fund its $32 billion expansion in Arizona at the company’s Ocotillo campus in Chandler. Intel calls the transactions the Semiconductor Co-Investment Program, or SCIP.
Intel, led by CEO Pat Gelsinger, is unfolding a massive expansion aimed at boosting its own chips in the market and transforming the company into a leading manufacturer of other chip designers’ products.
The company is set to get nearly $20 billion in grants and loans through the CHIPS Act for its projects, and a federal investment tax credit could be worth at least that much. But the projects are expensive: In the U.S., in addition to the Arizona expansion, the plan includes investments of $36 billion in Oregon, $28 billion in Ohio and $3.5 billion in New Mexico.
“This transaction allows us to share our investment with an established financial partner on attractive terms while maintaining our strong investment-grade credit rating,” Dave Zinsner, Intel’s chief financial officer, said in a joint news release with Apollo.
The deal is expected to close in the second quarter.