Intel plans US$15 billion share sale as turnaround rally lifts stock
Tech giant is looking to fund the build-out of its chip contract manufacturing business
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[SANTA CLARA, California] Intel on Monday (Aug 10) said that it is planning to raise US$15 billion through a share sale, as it looks to fund the costly build-out of its chip contract manufacturing business by cashing in on a stock surge fuelled by its turnaround efforts.
Once a dominant force in the global chip industry, Intel is investing heavily in new facilities and advanced packaging capabilities as it seeks to challenge industry leaders such as Taiwan Semiconductor Manufacturing Co in contract chip manufacturing.
Its shares fell more than 3 per cent in pre-market trading, likely on concerns about shareholder dilution from the stock sale.
The stock has more than doubled this year, outperforming rivals. The shift towards artificial intelligence agents has powered demand for central processing units, with Intel executives saying that orders have outstripped the company’s manufacturing capacity.
This booming demand led the chipmaker to raise its capital expenditure forecast for this year from US$18 billion to US$20 billion in July.
It also committed to high-volume production of chips using its 14A manufacturing process in 2028, after previously warning that the technology could be shelved without a major external customer.
Its foundry unit has won Tesla as a 14A customer and optimism for another marquee client grew after US President Donald Trump said that Apple would make processors with Intel, though neither company confirmed it.
Intel plans to give underwriters a 30-day option to buy up to US$2.25 billion worth of additional shares at the offer price, minus discounts.
JP Morgan Securities, Goldman Sachs, Morgan Stanley and Citigroup Global Markets are acting as joint book-running managers. REUTERS
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