Mercury Engineering was involved in a €17bn new advanced chip manufacturing facility recently opened by Intel at its Leixlip facility in Co Kildare. Photo: Colin Keegan/Collins
Intel has agreed to sell a stake in a plant in Ireland to Apollo Global Management Inc. for $11bn, helping bring in more external funding for a massive expansion of its factory network.
Under terms of the deal, the investment firm will take a 49pc share of a joint venture that owns Intel’s Fab 34, the chipmaker said in a statement Tuesday. It’s the second such investment program that Intel has announced, part of an effort to lessen the burden on its already-stretched finances.
Chief Executive Officer Pat Gelsinger is pushing an ambitious and expensive plan to return Intel to the summit of the semiconductor industry. He’s investing heavily to revitalize its struggling product lineup and pouring money into plants around the world, aiming to reinvigorate its manufacturing and attract external outsourced-manufacturing customers.
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Intel, once the richest company in the semiconductor industry, has been forced to seek external funding in a program it’s dubbed “Smart Capital.”
“The announcement highlights Intel’s continued progress in its transformation strategy,” the company said in the statement. “The company continues to advance to create financial flexibility and accelerate its strategy, including investing in global manufacturing operations, while maintaining a strong balance sheet.”
Intel said that construction of the plant, on an existing company site in Leixlip near Dublin, is “largely complete.” The transaction, which allows Intel to invest its money elsewhere, will be completed in the second quarter of 2024. Fab 34 will use Intel’s 4 and 3 process technologies.
In 2022, Intel announced a deal with Brookfield Infrastructure Partners LP to secure a $15 billion commitment to help finance a semiconductor complex in Arizona.
That deal helped ease fears that Gelsinger’s revival plan would prove too costly. A string of weak earnings results †along with the loss of market share to rivals such as Nvidia Corp. †have renewed those concerns and weighed on Intel’s stock.
The shares, which fell less than 1pc at $30.03 in New York trading Tuesday, are the worst-performing member of the Philadelphia Stock Market Semiconductor Index. They’re down 40pc.
(Bloomberg).
