Intel In Advanced Talks With Apollo For $11B Ireland Plant Partnership: Report

Zinger Key Points
  • Apollo Global Management to invest $11 billion in Intel's Irish chip plant.
  • Intel seeks partnerships amid financial hurdles in its chip expansion.

Intel Corp INTC is reportedly in advanced talks for a transaction in which Apollo Global Management, Inc. APO would supply more than $11 billion to help the chip giant build a plant in Ireland.

The two companies are in exclusive negotiations for a deal that could materialize in the upcoming weeks, barring any unexpected obstacles, according to a report from the Wall Street Journal.

Previously, several other investment firms, such as KKR & Co Inc KKR and Stonepeak, were also contenders until Apollo gained the lead, the report mentioned.

Chief Executive Pat Gelsinger is overseeing Intel’s expansion, constructing or enhancing facilities in Arizona, Ohio, and Ireland, among other locations, to meet the rising chip demand. 

These ventures also aim to bolster Intel’s contract chip-making business, competing with industry giants Taiwan Semiconductor Mfg. Co. Ltd TSM and Samsung Electronics Co., Ltd. SSNLF.

Intel faces financial challenges due to the high costs of new projects, like state-of-the-art chip factories, which can reach $20 billion. 

Hindered by a slowdown in its primary business of chip supply for PCs and servers, Intel has been seeking partners to finance these endeavors. 

Also ReadIntel Eyes Q2 Revenue Below Guidance Midpoint, Hit By US Ban On Huawei: Details

The company’s shares plummeted in recent months, and construction plans in Ohio were delayed.

Approximately two years ago, Intel entered a $30 billion deal with Brookfield Asset Management Ltd BAM, with Intel funding a majority of new chip-making facilities in Chandler, Arizona, and retaining control over the entity owning the factories.

Moreover, aside from investor funds, Intel anticipates receiving substantial government grants for its U.S. projects, facilitated by the Chips Act of 2022.

Intel is part of a trend where multinational companies secure financing from asset managers for their ventures. Recently, T-Mobile US, Inc. TMUS partnered with Europe’s EQT Corp EQT to expand its broadband fiber network.

Intel has a long-standing presence in Ireland, with operations including a semiconductor facility in County Kildare and a research campus in the west of the country.

Intel stock has gained about 0.17% in the last 12 months. Investors can gain access to the stock via First Trust Nasdaq Semiconductor ETF FTXL and Strive U.S. Semiconductor ETF SHOC.

Read NextIntel, Qualcomm Export Licenses Revoked By US, Tech Giants Won’t Be Able To Sell Chips To Huawei: Report 

Price Action: INTC shares are trading higher by 0.74% at $30.07 in premarket at the last check Monday.

DisclaimerThis content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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