Apollo Global Management Invests $11 Billion in Intel's Irish Manufacturing Facility

Apollo Global Management has announced an $11 billion investment in Intel's Fab 34 facility in Leixlip, Ireland, giving Apollo a 49% equity stake in a joint venture overseeing the high-tech manufacturing plant and Intel retaining a 51% controlling stake and full operational control.

The investment, expected to close in the second quarter of 2024, is part of Intel's "Smart Capital" strategy, designed to attract external investments to enhance Intel's supply chain resilience and expand its manufacturing footprint without placing excessive financial strain on the company's balance sheet. By partnering with Apollo, Intel can reallocate resources to other critical areas, ensuring continued innovation and growth in the semiconductor sector.

Intel has already invested approximately $18.4 billion in Fab 34, which began high-volume manufacturing of Intel Core Ultra processors on Intel 4 technology in September 2023. The facility is one of Intel's most advanced, utilizing extreme ultraviolet (EUV) lithography to produce cutting-edge semiconductors.

The joint venture will produce wafers for Intel and external customers, with Intel committed to purchasing a significant portion of the output. This arrangement allows Intel to meet its wafer demand while optimizing production costs. For financial reporting, Intel will consolidate the joint venture's results, accounting for Apollo's 49% stake as non-controlling interests. While initial returns may be modest, profitability is expected to grow as Fab 34 reaches full operational capacity.

Intel's Chief Financial Officer, David Zinsner, emphasized that this partnership provides flexibility and supports Intel's broader goals. "Our 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," Zinsner stated. This investment aligns with Intel's efforts to expand its capacity in both the U.S. and Europe, addressing the growing global demand for silicon.

Apollo's substantial investment marks a pivotal moment for Intel's manufacturing operations in Ireland, reinforcing the company's commitment to maintaining a robust and diversified semiconductor supply chain. As the semiconductor market continues to grow, such strategic partnerships will be crucial for meeting future technological demands.