Intel has agreed to sell part of its stake in a factory in Ireland to Apollo Global Management for $11 billion to bring in more external funds for the massive expansion of its factory network.

According to the official website, Intel announced a final agreement on the 4th local time. According to the agreement, Apollo-managed funds and affiliates will lead an investment of US$11 billion to acquire a 49% stake in the joint venture entity related to Intel Fab 34 from Intel. Intel will retain full ownership and operational control of the Fab 34 wafer factory and its assets.

Intel's advanced high-volume manufacturing

It is understood that Fab 34 in Ireland is Intel's advanced high-volume manufacturing (HVM) factory, the first mass production base for Intel 3 and Intel 4 manufacturing processes using extreme ultraviolet (EUV) lithography machines. To date, Intel has invested $18.4 billion in the factory. The factory is located on the existing company site in Leixlip near Dublin, and the construction is "basically completed", and the project will be basically completed in June. The transaction enables Intel to release part of its investment and redeploy it to other parts of its business while continuing to build Fab

34. As part of its transformation strategy, Intel has pledged to invest billions of dollars to regain process leadership and establish leading wafer manufacturing and advanced packaging capabilities worldwide. The transaction is expected to be completed in the second quarter and will enable Intel to redeploy part of its investment in the project to other parts of the business. This is the second such investment plan announced by Intel, aimed at alleviating its already tight financial burden.

Intel's forecasts and plans

Intel in April forecast second-quarter revenue and profit would fall short of market expectations as demand for its traditional data center and personal computing chips softened amid a booming market for artificial intelligence (AI) components. Intel CEO Pat Gelsinger is pushing an ambitious and expensive plan to return Intel to the top of the semiconductor industry. He is investing heavily to revive struggling product lines and pour money into factories around the world, aiming to revive manufacturing and attract outsourced manufacturing customers. "This transaction allows us to share our investment with an established financial partner on favorable terms," said Intel Chief Financial Officer David Zinsner. "This announcement highlights Intel's continued progress on its transformation strategy," Intel said. "The company continues to advance its strategy to create financial flexibility and accelerate its global manufacturing operations, including investing in global manufacturing operations, while maintaining a strong balance sheet." Under the terms of the agreement, Intel will purchase a minimum of the fab's output for sale either for itself or on behalf of customers. 

The agreement states that Intel will give priority to the fab over others in its network when selecting production sites.

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