Intel buys back all shares of its Irish semiconductor plant
Joint venture in Ireland was an expensive loan for Intel. The company is buying back all shares for $14.2 billion.
Intel's server processor Xeon 6+ alias Clearwater Forest with up to 288 efficiency cores, manufactured using Intel 3 technology.
(Image: Intel)
The so-called Fab 34 in Leixlip, Ireland, is returning to full ownership by Intel. The company intends to buy back the 49 percent stake from investor Apollo, with whom Intel had agreed on a purchase price of 14.2 billion US dollars. The reversal is not yet complete, according to the announcement.
The joint venture for operating the semiconductor plant will thus likely end after only two years. In 2024, Intel sold 49 percent of the shares for 11.2 billion US dollars to secure a short-term cash injection, at that time still under CEO Pat Gelsinger. Intel urgently needed money at that point to improve its finances. In return, Apollo was granted a share of the revenue Intel generated from processors produced at its Irish semiconductor plant.
(Image:Â Intel)
New Debt for More Revenue
Intel is still in the red, but Fab 34 is likely to be particularly lucrative: the manufacturer produces processors there with the Intel 3 and 4 manufacturing processes, including Xeon-6 processors for servers and data centers. Demand is currently so high that Intel is converting production lines from notebook and desktop CPUs to Xeon models. They should therefore generate good profits. For the repurchase, Intel is expected to take on 6.5 billion US dollars in new debt.
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For Apollo, the stake was a successful investment: the 3 billion US dollars plus corresponds to a return of almost 27 percent. Even adjusted for inflation, it would still be around 22 percent. The revenue share from the past two years is added on top, although its amount is unknown.
The stock market initially reacted positively to the announcement. Intel's stock rose by about eight percent after the announcement. However, due to statements by US President Trump regarding the Iran war, Intel and other tech stocks have fallen again in today's trading.
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