Asset management firm invests €11bn in Intel’s Leixlip plant

Apollo deal will fund chip maker's business strategy

Trade

Intel has sold 49% of its Fab 34 chip plant in Leixlip to asset manager Apollo for $11 billion.

The transaction is Intel’s second Semiconductor Co-Investment Program (SCIP) arrangement and an element of the company’s Smart Capital strategy designed to create financial flexibility to accelerate the company’s strategy.

To date, Intel has invested $18.4 billion in Fab 34 – the company’s leading-edge high-volume manufacturing (HVM) facility designed for wafers using the Intel 4 and Intel 3 process technologies.

The Apollo deal allows Intel to unlock and redeploy to other parts of its business a portion of this investment while continuing the build-out of Fab 34. As part of its transformation strategy, Intel has committed billions of dollars of investments to regaining process leadership and building out leading-edge wafer fabrication and advanced packaging capacity globally.

Intel will retain full ownership and operational control of Fab 34 and its assets.

“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.”

Apollo partner Jamshid Ehsani added: “This highly strategic capital transaction is among the largest private investments of its kind and showcases Apollo’s ability to provide creative, scaled capital solutions to leading corporations and infrastructure, and to contribute to supply chain resiliency.

“It also underscores our role as a trusted financing partner, leveraging private capital to help build the New Economy, including next generation AI technology which will require major investments in sustainable power generation, data centres, foundries and semiconductor capabilities.”

TechCentral Reporters

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