Intel is in the process of securing at least $2 billion in equity funding for its new fab in Ireland, reports Bloomberg, citing people familiar with the matter. The company has engaged an advisor and is currently seeking potential investors for the project.
Intel's Fab 34 near Leixlip, Ireland, is currently the only high-volume semiconductor production facility in Europe using extreme ultraviolet (EUV) lithography. The fab produces chips on Intel 4 process technology (previously known as Intel's 7nm node), which is currently used to build compute tiles for Intel's Core Ultra 'Meteor Lake' CPUs for client PCs and is expected to be used for some of the next-generation Xeon CPUs.
By today's standards, $2 billion is not a huge sum of money, and it is not enough to build a brand-new fab. However, it is enough to expand or upgrade an existing facility. Therefore, it is reasonable to assume that Intel is looking forward to expanding its Leixlip site either to increase its output or to adopt a newer process technology, such as Intel 3, Intel 20A, and Intel 18A. Keeping in mind that Intel needs more production capacity both for its own products and for customers of its Intel Foundry Services (IFS) contract chipmaking unit, both assumptions are realistic.
In 2022, Intel entered into an agreement with Brookfield Infrastructure Partners, which committed to investing up to $15 billion for a 49% stake in Intel's manufacturing expansion at the Ocotillo campus in Chandler, Arizona.
Under the terms of the agreement with Brookfield, both companies intend to jointly invest $30 billion in the continued expansion of the site, with Intel covering 51% and Brookfield contributing 49% of the overall project cost. Initially, Intel had earmarked $20 billion for its Fab 52 and Fab 62, but this amount increased to $30 billion because of the collaboration with Brookfield. As a result, the partnership with Brookfield has provided Intel with an additional $15 billion in free cash flow, enabling the company to allocate more funds to its new fabs without incurring new debt. Furthermore, this arrangement has allowed Intel to spend more money on other ventures (and/or keep its CapEx in check). This deal with Brookfield Infrastructure Partners sets a precedent for Intel's current fundraising efforts for its Irish facility.
