Intel Sells 49% Stake in Irish Plant to Apollo for $11B

Intel has announced an agreement to sell a 49% stake in its Irish wafer fabrication plant joint venture to Apollo Global Management for $11 billion. This strategic move is designed to secure additional external funding for Intel's expansive manufacturing network expansion. The transaction is expected to finalize in the second quarter, allowing Intel to reallocate some of its investment from this project to other areas of the business.

Intel CEO Pat Gelsinger is leading a bold and substantial initiative to reestablish Intel's leadership in the semiconductor industry. This strategy includes significant investments to rejuvenate Intel's product lineup and channel funds into global manufacturing facilities, aiming to revitalize production and attract external manufacturing clients.

Intel CFO David Zinsner stated, "This transaction enables us to share our investment with a seasoned financial partner on favorable terms."

Intel emphasized, "This announcement underscores our continued progress in executing our transformation strategy. The company remains focused on enhancing financial flexibility and accelerating its strategic objectives, including global manufacturing investments, while maintaining a robust balance sheet."

The Fab 34 wafer plant in Leixlip, Ireland, near Dublin, is Intel's first high-volume production site using extreme ultraviolet (EUV) lithography for Intel 3 and Intel 4 process technologies. Intel confirmed that construction at the existing site is "substantially complete," with engineering work expected to be finished by June.

Under the agreement terms, Intel will purchase the minimum output from the wafer plant for its own sales or on behalf of customers. The deal stipulates that Intel will prioritize this facility over other plants in its network when selecting production sites.

To date, Intel has invested $18.4 billion in this plant. Intel will retain full ownership and operational control of Fab 34 and its assets.

In 2022, Intel announced plans to build chip plants in Ireland and France, aiming to benefit from the European Commission's more lenient financing rules and subsidies as the EU seeks to reduce reliance on U.S. and Asian supply chains.

In April, Intel forecasted second-quarter revenue and profit below market expectations due to weak demand for traditional data center and personal computing chips, even as the market for artificial intelligence (AI) components thrives.