Intel, Apollo strike $11 billion deal over chip-manufacturing plant in Ireland

By Mike Murphy

Intel Corp. and Apollo Global Management announced a joint venture Tuesday for a chip-manufacturing facility in Ireland.

Apollo (APO) will lead an $11 billion investment and acquire a 49% equity stake from Intel in the Fab 34 facility in Leixlip, Ireland, the companies said in a statement Tuesday. The Wall Street Journal reported a pending deal last month.

Intel (INTC) will have a 51% controlling interest in the venture, which is expected to close in the second quarter. The Palo Alto, Calif.-based chip maker said it has invested $18.4 billion into the facility to date, and the transaction will allow it to redeploy a portion of that investment to other parts of its businesses, while continuing to build out Fab 34.

The deal "gives us additional flexibility to execute our strategy as we invest to create the world's most resilient and sustainable semiconductor supply chain," Intel CFO David Zinsner said in a statement.

Construction on the Fab 34 facility is nearly complete, and the plant began making Ultra processors there in September 2023. It's also ramping production of Granite Rapids, Intel's next-generation data-center product.

Intel shares fell about 1% on Tuesday, and are down 40% year to date. Intel has fallen behind its chip rivals in the AI field, and its last earnings report included an outlook that was worse than expected, including steep losses in its foundry business.

-Mike Murphy

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06-04-24 1903ET

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