Intel has offered 49 percent equity stake worth for $11 billion to Apollo Global Management in a joint venture that will manage Intel’s manufacturing facility Fab 34 in Ireland. Intel will have 51 percent stake in the JV.
The Fab 34 joint venture in Leixlip, Ireland, is the U.S. chipmaker’s first high-volume location for its Intel 4 manufacturing process using extreme ultraviolet lithography machines. It is designed for wafers using the Intel 4 and Intel 3 process technologies.
The deal, expected to close in the second quarter, would allow Intel to redeploy parts of its investment in the project to other parts of its business.
“This transaction allows us to share our investment with an established financial partner on attractive terms,” Intel Chief Financial Officer David Zinsner said.
Intel has invested $18.4 billion in the facility to date. The deal represents Intel’s second Semiconductor Co-Investment Program (SCIP) arrangement. SCIP is an element of Intel’s Smart Capital strategy, a funding approach designed to create financial flexibility to accelerate the company’s strategy, including investing in its global manufacturing operations.
The company announced plans in 2022 to build chip factories in Ireland and France as it seeks to benefit from easier European Commission funding rules and subsidies as the bloc looks to cut its dependence on U.S. and Asian supply, Reuters news report said.
The joint venture has the right to make chips at the facility, while Intel retains ownership and operational control of the factory itself.
Intel said construction of Fab 34 is largely complete, and manufacturing of Intel Core Ultra processors on Intel 4 technology began there in September 2023. The ramp of Granite Rapids, Intel’s next-generation data center product on Intel 3 technology, is well underway.
The JV will manufacture wafers for sale to Intel on a cost-plus-margin basis. Intel is required to finish the build-out of Fab 34 and purchase wafers from the JV for itself and external customers, with minimum volume commitments for its wafer demand.
In addition to Fab 34, Intel maintains a second manufacturing facility in Leixlip, Fab 24, which has been a key location for production of Intel’s 14-nanometer silicon microprocessors, while preparing to support Intel Foundry customers.
