Intel will repurchase Apollo’s 49% holding in the Fab 34 joint venture in Ireland and take sole ownership of the facility, the companies said in an announcement. The move returns Fab 34’s economics to Intel Foundry and removes the JV’s separated profit structure.
The transaction follows Intel’s conversion of Fab 34 into a separate venture and the minority sale to Apollo last year for $11.2 billion, according to the announcement. Under the original deal Fab 34 sold wafers back to Intel on a cost-plus-margin basis and Intel agreed to minimum purchase volumes, which insulated the JV’s cash flows while reducing Intel Foundry’s reported margins.
Intel plans to finance the repurchase from existing cash and roughly $6.5 billion of new debt, the announcement said. The company expects the buyback to boost margins for Intel Foundry, improve ongoing earnings per share by avoiding margin payments to Apollo on wafers from Fab 32, and to support better credit ratings beginning in 2027.
The companies said Apollo will receive a roughly $3 billion premium over the original transaction, with Intel agreeing to repurchase the 49% stake for $14.2 billion.
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Apollo Partner Jamshid Ehsani commented on the deal: "Flexibility and alignment are core to how we approach relationships as a long-term, solutions-oriented capital partner, and we are pleased to facilitate this transaction in support of Intel's evolving strategic and operational priorities," said Apollo Partner Jamshid Ehsani.
Fab 34 began high-volume manufacturing in 2023 and has produced chiplets for millions of CPUs and hundreds of thousands of wafers using Intel 4 and Intel 3 process technologies, the announcement added.
The recap
- Intel repurchases 49% stake in Fab 34 from Apollo.
- Repurchase price: $14.2 billion, roughly 27% nominal gain.
- Company expects credit-rating improvement starting in 2027 and beyond.
