Intel reportedly seeking $11B to finance facility in Ireland

Another huge investment for chip giant despite losses

Intel is holding negotiations with private equity investor Apollo Global Management to secure $11 billion in funding for a manufacturing facility in Ireland.

The Santa Clara giant is understood to be weeks away from to reaching an agreement, according to the Wall Street Journal, which cited unnamed people familiar with the matter.

Both Intel and Apollo declined to comment when contacted by The Register.

Reg readers might consider that if there was no truth whatsoever in the reports, the two companies would not hesitate to issue a rebuttal. We, however, decry such a cynical attitude.

If the report is to be believed, Apollo's High Grade Capital Solutions business, which handles large investment-grade companies, will be stumping up the required billions for the chipmaker. A number of alternative investment firms such as KKR are said to have already been considered.

The move would represent another huge investment by Intel, which is already building multibillion-dollar US-based semiconductor manufacturing facilities in Arizona and Ohio, plus another site in Israel and another in Germany. All of these new projects are at least partly funded by state subsidies such as the US CHIPS Act to a greater or lesser degree.

This is despite the silicon supremo reporting an overall loss of $437 million for the first quarter of this year due to falling demand in key markets such as datacenter products and a decline in PC shipments last year.

Intel, however, is obliged to invest for when the market upturn comes, and because the biz is also in the midst of a planned reorganization that separates out its foundry business – the chip manufacturing division – from the parts of the company that design and sell products. This is so that its foundry business can serve third-party customers as well as Intel's design teams in a bid to bring in more profit.

According to investment site SeekingAlpha, Intel agreed a similar deal with Brookfield Asset Management about two years ago. That agreement was for $30 billion to help Intel fund the cost of its facilities in Arizona.

As Intel is keeping its cards close to its chest on this Ireland project, it isn't clear if the funding is for an entirely new plant or to expand an existing one such as the facility at Leixlip or its R&D campus at Shannon. However, Intel claims to have already spent €17 billion ($18.5 billion) on doubling the available manufacturing space at its Leixlip site over the past several years.

Another possibility is that Intel could be planning to build an advanced packaging facility in Ireland instead. The Register reported in 2022 that the tech titan was close to sealing a deal with the Italian government to locate a semiconductor packaging and assembly plant in that country, but seems to have cooled on the idea since, with Italy's government announcing this March that Intel had postponed plans to invest there.

Advanced packaging has emerged as a key technology in recent years, allowing chipmakers to stitch together silicon to make a more complex integrated circuit. A shortage of packaging capacity has been blamed for availability of some products, such as Nvidia's high-end GPUs and Intel's own "Meteor Lake" Core Ultra processors. ®

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