Intel in talks to secure $11bn to expand its operations in Kildare

The tech giant has already poured billions into chip plants around the world

Intel is reportedly in advanced talks to secure $11bn (€10.1bn) toward a new expansion of its operations in Kildare.

The talks, first reported by The Wall Street Journal, are with a US private equity fund, Apollo Global Management.

No further details about the potential expansion were available at the time of going to press.

A spokesperson for Intel declined to comment on the matter.

Other alternative US asset managers in addition to Apollo, including KKR and Stonepeak, had also previously held talks to fund the Intel facility in Ireland, Bloomberg News reported last month.

Local politicians, including one TD, contacted by the Irish Independent, said they had no knowledge of any expansion plans.

The IDA was unavailable to comment on the question.

Last September, Intel opened its new Fab 34 manufacturing facility, the culmination of a €17bn investment into the Kildare site.

The move expanded Intel’s Irish workforce to 6,500.

In an interview with this newspaper last year, CEO Pat Gelsinger said Intel would be building and operating in Ireland “for decades”.

Intel has been under severe pressure by advanced rivals such as Nvidia, whose chips are preferred for companies that are focusing on artificial intelligence (AI) computing.

Intel wants to build more facilities that would see it become a chipmaker for other companies, mimicking rivals such as Taiwan-based TSMC, which is contracted as a “foundry” to make chips for tech giants such as Apple.

Intel’s Irish facilities are mainly focused on its own branded chips for a variety of purposes, including PC computers and servers.

The billions from Apollo are an alternative funding mechanism to Intel’s own weakened financial capacity, which has been hit badly in recent years by under-performing against rivals such as Nvidia.

Intel has already poured billions into chip plants around the world.

The company said in December that it was investing $25bn in Israel after securing $3.2bn worth of incentives from the nation’s government.

In June, it struck a deal with Germany to invest around €30bn in semiconductor operations.

A pact with Apollo would follow on from a previous transaction in which Brookfield Infrastructure Partners agreed to invest as much as $15bn for a stake in Intel’s manufacturing expansion in Arizona

Mr Gelsinger has been working to diversify the company’s manufacturing operations outside of Asia, which dominates chip production today.

He is also striving to restore the chip pioneer’s technological leadership.

In April, Intel’s shares tanked after the company said that its new foundry division had sales of $18.9bn in 2023, down from $27.5bn the previous year, and that operating losses at the new unit had widened.

The chipmaker warned at the time that it may not reach a break-even point for several more years.

The potential partnership comes as superpowers around the world earmark hundreds of billions of dollars for companies like Intel to build the next generation of semiconductor manufacturing in their backyards.

The US and European Union have led these funding efforts, in part as a means of challenging China for chip dominance but also as a broader effort to lessen their dependency on Asian supplies.

Reporting on:independent.ie