Leixlip, Ireland\/ NY\/ Santa Clara Calif. \u2014 Intel Corpo\u00adra\u00adtion and Apollo announ\u00adced a defi\u00adni\u00adtive agree\u00adment under which Apollo-mana\u00adged funds and affi\u00adlia\u00adtes will make an $11 billion invest\u00adment to acquire from Intel a 49% inte\u00adrest in a joint venture rela\u00adted to Intel\u2019s Fab 34.<\/p>\n
The tran\u00adsac\u00adtion is Intel\u2019s second agree\u00adment under the Semi\u00adcon\u00adduc\u00adtor Co-Invest\u00adment Program (SCIP). SCIP is an element of Intel\u2019s smart capi\u00adtal stra\u00adtegy, a finan\u00adcing approach desi\u00adgned to create finan\u00adcial flexi\u00adbi\u00adlity to acce\u00adle\u00adrate the company\u2019s stra\u00adtegy, inclu\u00adding invest\u00adments in its global manu\u00adfac\u00adtu\u00adring opera\u00adti\u00adons, while main\u00adtai\u00adning a strong balance sheet.<\/p>\n
Fab 34<\/strong> is loca\u00adted in Leixlip, Ireland, and is Intel\u2019s state-of-the-art high volume manu\u00adfac\u00adtu\u00adring (HVM) faci\u00adlity for wafers manu\u00adfac\u00adtu\u00adred using Intel 4 and Intel 3 process tech\u00adno\u00adlo\u00adgies. To date, Intel has inves\u00adted 18.4 billion dollars in Fab 34. This tran\u00adsac\u00adtion will allow Intel to free up some of these invest\u00adments and rede\u00adploy them to other busi\u00adness areas while conti\u00adnuing the expan\u00adsion of Fab 34. As part of its restruc\u00adtu\u00adring stra\u00adtegy, Intel has inves\u00adted billi\u00adons of dollars to regain process leader\u00adship and build global capa\u00adcity for the manu\u00adfac\u00adture of leading-edge wafers and advan\u00adced packaging.<\/p>\n Under the terms of the agree\u00adment, the joint venture will receive the rights to manu\u00adfac\u00adture wafers in Fab 34 to meet the long-term demand for Intel\u2019s products and provide capa\u00adcity for Intel Foundry\u2019s custo\u00admers. Intel will hold a 51% majo\u00adrity stake in the Joint Under\u00adta\u00adking. Intel will retain full owner\u00adship and opera\u00adtio\u00adnal control of Fab 34 and its assets. The tran\u00adsac\u00adtion is inten\u00added to improve the company\u2019s solid balance sheet with capi\u00adtal at a price below Intel\u2019s cost of equity. It is expec\u00adted that the invest\u00adment in the joint venture will be trea\u00adted as equity-like from a ratings perspective.<\/p>\n \u201cThe agree\u00adment between Intel and Apollo provi\u00addes us with addi\u00adtio\u00adnal flexi\u00adbi\u00adlity in execu\u00adting our stra\u00adtegy to create the most resi\u00adli\u00adent and sustainable semi\u00adcon\u00adduc\u00adtor supply chain<\/strong> in the world. Our invest\u00adments in state-of-the-art capa\u00adcity in the U.S. and Europe will be criti\u00adcal to meeting the growing demand for sili\u00adcon as the global semi\u00adcon\u00adduc\u00adtor market doubles in the next five years,\u201d said David Zins\u00adner, Intel\u2019s CFO. \u201cIt also unders\u00adcores our role as a trus\u00adted finan\u00adcing part\u00adner lever\u00adaging private capi\u00adtal to build the new economy, inclu\u00adding next-gene\u00adra\u00adtion AI tech\u00adno\u00adlogy that will require major invest\u00adments in sustainable energy gene\u00adra\u00adtion, data centers, found\u00adries and semi\u00adcon\u00adduc\u00adtor capacity.\u201d<\/p>\n Details of the transaction<\/strong><\/p>\n Cons\u00adtruc\u00adtion of Fab 34 is largely complete, and large-scale produc\u00adtion of Intel\u00ae Core\u2122 Ultra proces\u00adsors on Intel 4 tech\u00adno\u00adlogy began there in Septem\u00adber 2023. The ramp-up of Granite Rapids, Intel\u2019s next-gene\u00adra\u00adtion data center product based on Intel 3 tech\u00adno\u00adlogy, is also in full swing.<\/p>\n The joint venture will manu\u00adfac\u00adture wafers for sale to Intel on a cost-plus-margin basis. Under the agree\u00adment, Intel is obli\u00adged to complete the expan\u00adsion of Fab 34 and to purchase wafers from the joint venture for itself and for exter\u00adnal custo\u00admers, with mini\u00admum quan\u00adti\u00adties for wafer requi\u00adre\u00adments being promi\u00adsed once the plant has been completed.<\/p>\n For the purpo\u00adses of finan\u00adcial report\u00ading, Intel expects to conso\u00adli\u00addate the results of the joint venture via the net result and to include the result attri\u00adbu\u00adta\u00adble to the 49% inte\u00adrest in the net result of non-control\u00adling inte\u00adrests. Intel assu\u00admes that the net profit attri\u00adbu\u00adta\u00adble to non-control\u00adling inte\u00adrests will be limi\u00adted in the first two years, but will increase there\u00adaf\u00adter as the factory is fully utilized.<\/p>\n Intel\u2019s manu\u00adfac\u00adtu\u00adring sites in Ireland<\/strong><\/p>\n Intel cele\u00adbra\u00adted the opening of Fab 34 in Ireland in Septem\u00adber 2023, marking the first use of extreme ultra\u00advio\u00adlet (EUV) litho\u00adgra\u00adphy in high-volume manu\u00adfac\u00adtu\u00adring in Europe. Fab 34 is desi\u00adgned for the high-volume produc\u00adtion of Intel 3 and Intel 4 tech\u00adno\u00adlo\u00adgies. In addi\u00adtion to Fab 34, Intel has a second manu\u00adfac\u00adtu\u00adring faci\u00adlity in Leixlip, Fab 24, which is an important site for the produc\u00adtion of Intel\u2019s 14-nano\u00adme\u00adter sili\u00adcon micro\u00adpro\u00adces\u00adsors and is also prepa\u00adring to support Intel foundry custo\u00admers. The tran\u00adsac\u00adtion with Apollo rela\u00adtes only to Fab 34.<\/p>\n Consul\u00adtant <\/strong><\/p>\n Gold\u00adman Sachs & Co.<\/strong> acted as lead finan\u00adcial advi\u00adsor to Intel<\/strong>, while Skad\u00adden, Arps, Slate, Meag\u00adher & Flom LLP and Ever\u00ads\u00adheds Suther\u00adland acted as legal advi\u00adsors to Intel<\/strong>.<\/p>\n The law firm of Paul, Weiss, Rifkind, Whar\u00adton & Garri\u00adson LLP is advi\u00adsing the<\/strong> funds and affi\u00adlia\u00adtes mana\u00adged by Apollo<\/strong>, while Latham & Watkins LLP<\/strong> is provi\u00adding legal advice to Apol\u00adlo\u2019s co-inves\u00adtors<\/strong>.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Leixlip, Ireland\/ NY\/ Santa Clara Calif. \u2014 Intel Corpo\u00adra\u00adtion and Apollo announ\u00adced a defi\u00adni\u00adtive agree\u00adment under which Apollo-mana\u00ad\u00adged funds and affi\u00adlia\u00adtes will make an $11 billion invest\u00adment to acquire from Intel a 49% inte\u00adrest in a joint venture rela\u00adted to Intel\u2019s Fab 34. The tran\u00adsac\u00adtion is Intel\u2019s second agree\u00adment under the Semi\u00adcon\u00adduc\u00adtor Co-Inves\u00adt\u00ad\u00adment Program (SCIP). SCIP [\u2026]<\/p>\n","protected":false},"author":2,"featured_media":51663,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wp_typography_post_enhancements_disabled":false,"footnotes":""},"categories":[886,1364,1365,1366,1367,1368,1369],"tags":[],"class_list":["post-51665","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-en","category-featured-en","category-private-equity-en","category-news-en","category-lawyers-tax-advisors-auditors-en","category-lawyers-tax-consultants-auditors","category-investors"],"yoast_head":"\n