Intel has entered into exclusive talks with Apollo Global to finance a $11bn chipmaking plant in Ireland. This move comes as large corporations are increasingly turning to private capital groups instead of banks to fund their expansion projects.
The semiconductor giant is looking to modernize its chipmaking production facilities to meet the rapid advancements in artificial intelligence technology. Intel has been in discussions with other private capital groups such as KKR and Stonepeak before entering exclusive talks with Apollo.
Intel is in the process of transforming its business under the leadership of CEO Pat Gelsinger. The company aims to regain leadership in designing leading-edge chips and overhauling its manufacturing operations to build chips for competitors.
In March, the US government announced funding and loans for Intel under the 2022 Chips Act to boost its capacity to build chips at new plants in Arizona, New Mexico, Ohio, and Oregon.
Intel is positioning itself as a national champion that can shift chip production away from Asia to the US and Europe in the coming years. The company is also building a new government-subsidized plant in Germany.
Intel’s manufacturing business incurred operating losses in 2023, but the company aims to break even by 2027. Intel has previously partnered with private capital groups to finance the construction of new semiconductor fabrication plants.
Apollo has emerged as a large lender for investment-grade rated loans to companies like Air France/KLM and Vonovia. Apollo aims to expand its capacity for similar arrangements, focusing on lending for infrastructure projects such as digital communications networks, data centers, renewable energy facilities, and semiconductors.
Ireland’s government, which heavily relies on corporation tax revenues, had no immediate comment on the talks. Intel has invested significantly in Ireland since 1989 to expand its chip fabrication operations.