Intel closing in on $11 billion deal for Ireland factory funding — Apollo set to pay out 5x Intel’s funding goal

Intel is nearing the conclusion of its talks with Apollo Global Management to finalize a deal providing Intel with $11 billion to fund and expand its Fab 34 in Leixlip, Ireland, as reported by the Wall Street Journal. Intel’s search for capital has been ongoing since February when Intel was first reportedly seeking $2 billion for the project.

Apollo Global Management has been linked to the fundraising effort since April, when it was reported that Apollo was to enter a joint venture with rival investment firms KKR and Stonepeak to fund the Leixlip project. Apollo emerged as the frontrunner and pulled ahead as a solo partner recently, according to sources familiar with the matter. The companies are expected to finalize their deal in the coming weeks.

Intel’s Fab 34 in Ireland has been a boon for the company and its strong long-term relationship with Ireland. Fab 34, a recent addition to Intel’s Ireland campus, manufactures the Intel 4 process technology to make compute tiles for Intel’s Core Ultra Meteor Lake processors. The fab is the only high-volume semiconductor manufacturer in Europe using extreme ultraviolet (EUV) technology for its workflow, leading speculators to guess that Intel wants Leixlip to expand its production to more ambitious process nodes such as Intel 3, Intel 20A, and Intel 18A, which will see action in Intel’s Arrow Lake and Panther Lake families.

The latest news is that current talks hover around an $11 billion deal — five times greater than Intel’s initial plans — which makes more sense in the context of Intel’s business performance lately. When Intel posted its financial results for Q1 2024, it revealed a loss of $2.5 billion from its foundry unit. Intel has attempted to quell some of this loss with Intel Foundry Services (IFS), its contract chip manufacturing unit that’s intended to capitalize off of fabless manufacturers — much like TSMC’s relationship with Nvidia.

IFS is still dealing with expenses brought about by Intel’s recent push to expand and build new facilities. This results in a short-term loss, so the moneymen at Intel likely pushed to increase the Apollo investment amount to make up for this shortfall.

We continue to watch as this story unfolds, as the best information right now comes from the always ambiguous “sources close to the matter.” For more news on Arrow Lake, Panther Lake, and the future of Intel’s chip roadmap beyond, yesterday’s major Dell leak spilled the beans on Intel’s timeline for expanding its CPU stable. Unfortunately for Europe, Intel’s Ireland campus will be the closest the continent comes to homegrown CPUs for a while longer, as the first European-based processor for supercomputers from SiPearl has been delayed… again.