Intel Corp is in advanced talks with Apollo Global Management Inc over a deal that would have the investment firm providing more than US$11 billion in funding for a chip manufacturing plant in Ireland, the Wall Street Journal reported yesterday.
The two companies are in exclusive talks and could reach an agreement in the coming weeks, the newspaper said, citing people familiar with the discussions who it didn’t identify.
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.
Photo: Reuters
Apollo and Intel declined to comment. Other alternative asset managers in addition to Apollo, including KKR & Co and Stonepeak Partners LLC, had also previously held talks to fund the Intel facility in Ireland, Bloomberg News reported last month.
Intel chief executive officer Pat Gelsinger has been working to diversify the company’s manufacturing operations outside of Asia, which dominates chip production today. He’s also striving to restore the chip pioneer’s technological leadership after companies including Nvidia Corp and Taiwan Semiconductor Manufacturing Co (台積電) eclipsed its capabilities.
As part of Gelsinger’s turnaround efforts, Intel is becoming a so-called foundry — a contract manufacturer that makes chips for other companies. Last month, Intel’s shares tanked after the company said its new foundry division had sales of US$18.9 billion last year, down from US$27.5 billion 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.
Intel has already poured billions into chip plants around the world. The company said in December last year that it was investing US$25 billion in Israel after securing US$3.2 billion worth of incentives from the nation’s government. In June last year, it struck a deal with Germany to invest around 30 billion euros (US$32 billion) in semiconductor operations.
A pact with Apollo would follow on a previous transaction in which Brookfield Infrastructure Partners LP agreed to invest as much as US$15 billion for a stake in Intel’s manufacturing expansion in Arizona.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS