intel Shares rose 10% on Wednesday after the U.S. chipmaker said it would buy back the 49% stake it does not own in its Fab 34 chip facility in Ireland for $14.2 billion.
Semiconductor company sells 49% stake in Irish manufacturing facility to acquisition company Apollo Global Management In 2024, it will reach $11.2 billion.
“The 2024 agreement was the right time and the right structure to provide Intel with meaningful flexibility to accelerate important initiatives,” Intel CFO David Zinsner said in a press release. “Today, we have a stronger balance sheet, improved financial discipline and an evolved business strategy.”
The move signals the company is back on solid footing with renewed confidence.
When Intel sold its stake in 2024, it was a very different time for the U.S. chipmaker. The company is in the midst of a $100 billion investment to expand chip manufacturing in the United States, including a large chip fab that opened in Arizona last year.
After years of lagging behind chipmaker leaders Taiwan Semiconductor Manufacturing Co., Ltd.Former CEO Pat Gelsinger was committed to Intel’s foundry ambitions in the U.S. He was ousted in late 2024, but Intel’s Arizona chip factory project remained on track.
Intel said the buyback agreement is “underpinned by the increasingly important role of CPUs in the AI era.”
Intel is known for making industry-leading PC and server central processing units (CPUs), but it has a different business model than most chipmakers.
Other leaders say, advanced micro device Nvidia outsources manufacturing of its complex and expensive silicon, while Intel both designs and manufactures its own chips and is expected to manufacture them for other companies as well.
At Fab 34 in Ireland, Intel makes PC and server CPUs using less advanced chip nodes than those it makes in Arizona, but the new need for CPUs is driving up overall demand.
Intel told CNBC that its server CPUs, including the latest Irish-made Xeon 6 CPUs, are currently in highest demand.
Nvidia recently told CNBC that CPUs are “becoming the bottleneck” as agent-based artificial intelligence changes computing needs.
Futurum Group called this a “silent supply crisis” and predicted that CPU market growth could outpace GPU (graphics processing unit) growth by 2028.
GPUs are ideal for training and running AI models because they can perform many operations simultaneously on thousands of cores, while CPUs have fewer powerful cores that perform general-purpose tasks sequentially. Agentic AI moves large amounts of data between multiple agents, which requires a lot of general computing power.
In the latest signs of a CPU renaissance, Nvidia CEO Jensen Huang announced an entire rack filled entirely with Vera CPUs earlier this month, and British chip architecture company Arm Holdings announced its first homegrown chip (also a CPU).
Intel is currently manufacturing chips at its state-of-the-art Node 18A in Arizona, but has not yet secured a major external customer. For now, Intel is its main customer, producing Core Ultra Series 3 PC processors at its factories.
In Ireland, Intel manufactures previous generations of PC processors and makes the latest server CPUs with Intel 3, the generation before 18A.
Intel 3 is the second generation chip technology used by the company. ASMLextreme ultraviolet lithography equipment. These EUV machines are also being used to manufacture 18A, opening the possibility for Intel to manufacture more advanced chips in Ireland in the future.
Intel told CNBC that it has no plans to introduce 18A to Fab 34 in the short term.
The Irish factory is also important for another step in the chip manufacturing process called advanced packaging, which is needed to connect individual chips to larger systems such as circuit boards. Intel told CNBC that some of the advanced packaging for its 18A chips is done at its Irish factory.
Intel’s daily stock price chart.
Correction: David Zinsner is Intel’s CFO. A previous version misspelled his name.
