Intel seeks $2bn to help fund chip manufacturing in Ireland

Giant employs almost 5,000 people in Ireland

Chip maker Intel, which employs almost 5,000 people in Ireland, is seeking to raise at least $2bn (€1.86bn) in equity to help fund a semiconductor fabrication facility in Ireland.

Chip maker Intel, which employs almost 5,000 people in Ireland, is seeking to raise at least $2bn (€1.86bn) in equity to help fund a semiconductor fabrication facility in Ireland, according to people with knowledge of the matter.

The chipmaking giant, which is working with an adviser, has begun soliciting interest from potential investors, people, the sources said. An Intel representative declined to comment.

A transaction would follow the chipmaker’s 2022 deal with Brookfield Infrastructure Partners, in which the firm agreed to invest as much as $15bn for a 49% stake in Intel’s manufacturing expansion at its Ocotillo campus in Chandler, Arizona.  

Intel Ireland employs most of the 4,900 people at its manufacturing sites at Leixlip in Co Kildare. It also has a research and development facility with around 300 people in Shannon, Co Clare. 

Brookfield Infrastructure earlier this year had said it made $2bn in new investments in the transport and data industries last year. 

Intel shares, which rose almost 2% on Wednesday, have nonetheless tumbled 54% from this time last year, as investors weigh the growing threat to the company from rivals Nvidia and Arm, which have benefitted from the market hype surrounding their artificial intelligence products.  

Nvidia on Wednesday overtook Google-parent Alphabet in stock market value to become the third biggest US company, days before the poster child of the artificial intelligence, or AI, boom is due to report fourth-quarter results. 

Strong demand for the US company's chips used in artificial intelligence computing has powered the stock 231% in the past 12 months to record highs, taking its market value to $1.83trn. 

In comparison, Alphabet's market capitalisation is $1.82tn. A 50% surge this year has lifted Nvidia to the top spot among the S&P 500 components stock performance, surpassing even the components of the so-called "Magnificent Seven", which includes Amazon, Apple, and Alphabet. 

Earlier this week, it exceeded Amazon's market value, leaving the retail giant in the fifth spot. Microsoft overtook Apple last month to become the largest US company. 

Analysts expect Nvidia to post $11.38bn in fourth-quarter profit, up more than a staggering 400% from a year ago. Its revenue is expected to surge over three-fold to $20.37bn. 

Nvidia now trades at over 33 times its forward earnings estimates, above the industry median multiple of 27. A higher multiple indicates the stock is more likely to have priced in its earnings potential, leaving little room for further growth. 

Investors buying into AI-driven shares boosted global stock markets on Wednesday.

“Dip buyers have come in following yesterday’s drop in the wake of US inflation data, mounting a holding action that is preventing any further downside for the time being.," said Chris Beauchamp, chief market analyst at online broker IG. 

"Bullish hopes rest in the view that the Fed is unlikely to shift position after one reading," Mr Beauchamp said. 

• Bloomberg, Irish Examiner, and Reuters