Investment group pays $11bn for stake in Intel's Ireland fab
Intel has confirmed that Apollo and its affiliates will acquire a 49% equity interest in a joint venture entity related to the chip firm's Fab 34.
Under the agreement, the JV will have rights to manufacture wafers at Fab 34, and thereby support long-term demand for Intel’s products and provide capacity for Intel Foundry customers. Intel will retain a 51% controlling interest in the joint venture, and full ownership and operational control of Fab 34 and its assets.
The transaction gives Intel the ability to accelerate its fab base while keeping some control of its costs. It represents the second deal by its Semiconductor Co-Investment Program (SCIP) arrangement. SCIP is part of Intel’s Smart Capital strategy to create financial flexibility, and a strong balance sheet with capital below Intel’s cost of equity.
Fab 34 is located in Leixlip, Ireland, and produces wafers using the Intel 4 and Intel 3 process technologies. To date, Intel has invested USD 18.4 billion in the facility. Construction is largely complete, and high-volume manufacturing began there in September 2023. It is believed to be the first fab in Europe to use extreme ultraviolet lithography (EUV).
“Intel’s agreement with Apollo gives us additional flexibility to execute our strategy as we invest to create the world’s most resilient and sustainable semiconductor supply chain. Our investments in leading-edge capacity in the US and Europe will be critical to meet the growing demand for silicon, with the global semiconductor market poised to double over the next five years,” said David Zinsner, Intel CFO. “This transaction allows us to share our investment with an established financial partner on attractive terms while maintaining our strong investment-grade credit rating.”
