Intel is said to be contemplating the sale of a significant minority stake in its Leixlip plant in Co Kildare as part of its $11 billion (€10bn) refinancing strategy, according to those privy to the matter. Yet, these funds aren’t expected to nurture the establishment of a new Fab manufacturing centre at the Kildare location. Instead, this capital will likely be spread throughout the Intel group.
Historically, Intel has joined forces with substantial private equity groups to back the establishment of new semiconductor factories. In 2022, they offloaded up to 49% of a chip-making plant being constructed in Arizona, selling to Canada’s Brookfield Infrastructure Partners. This $15 billion transaction was made with the objective of backing a $30 billion project.
Arrangements like this enable Intel to keep a controlling stake and plant governance while obtaining the essential financing for their manufacturing expansions. For the investors, this implies a certain property ownership and a portion of the profits.
Recently, the Wall Street Journal reported that Intel has initiated exclusive discussions with Apollo Global regarding the $11 billion financing. Intel has been believed to be in talks with numerous private capital groups throughout the past year, exploring potential financing alternatives, with the Leixlip plant being a pivotal part of such strategies.
Intel launched its new Fab 34 facility in Leixlip the prior year, effectively doubling Intel’s manufacturing footprint in Ireland. A total of €17 billion is being invested in this plant, which is projected to employ 1,600 more full-time employees when it reaches full operational capacity. In Ireland, Intel hires around 6,500 personnel in total.
Intel has refrained from commenting on the financing negotiations.
The country’s Finance Minister, Michael McGrath, expressed on Tuesday that the government has been in multiple exchanges with Intel regarding their expansion schemes. However, while in Brussels at EU finance ministers’ meetings, he chose not to disclose the specifics of these conversations, stating that he won’t be divulging details about “a particular deal until the matter is finalised”.
He added that there have been numerous dialogues with Intel over the past few months pertaining to their expansion strategies, confirming that “Intel is a very important partner of IDA Ireland and the Irish Government”. Part of these discussions involved the role of private sector investment along with “what support the Irish Government can provide through IDA Ireland,” as stated by Mr McGrath.
“We are keenly committed to backing enterprises such as Intel, which are crucial for the economic prosperity of our nation. An intimate collaboration exists, thus there are continuous talks amidst the Government, IDA Ireland, and Intel about their prospective growth plans.”
Intel is in the midst of discussions to secure funding for a bold expansion of their semiconductor manufacturing plants. The aim is to move supply chains from Asia to Western Europe and North America, in parallel with upgrading their chip-production facilities to keep pace with the fast advancements in the sector of artificial intelligence technology.