Intel turns stock surge into $20 billion war chest for chip foundry
The capital raise comes as Intel ramps up spending on factories and its 14A process in a bid to establish itself as a major alternative to TSMC.
Intel raised $20 billion in an upsized share offering on Tuesday, seeking to fund the costly build-out of its chip contract manufacturing business by capitalizing on a surge in its stock price driven by its turnaround efforts.
Once a dominant force in the global chip industry, Intel is investing heavily in new manufacturing facilities and advanced packaging capabilities as it seeks to challenge industry leader TSMC in contract chip manufacturing.
Intel priced the offering at $95 per share, a 2.6% discount to Monday's closing price. The chipmaker had said on Monday that it aimed to raise $15 billion through the share sale. Bloomberg first reported the size of the upsized offering.
Intel's shares fell more than 4% on Monday. Even after that decline, the stock had nearly tripled so far this year, significantly outperforming rivals AMD and Nvidia, as well as the Philadelphia Semiconductor Index, which had risen nearly 75% over the same period.
Several analysts have said Intel's surging share price increased the likelihood of an equity raise to help finance its expansion plans.
"As a capital-intensive business that went a long way to wrecking its own balance sheet and prospects by focusing on financial engineering rather than physical engineering, courtesy of $82 billion of share buybacks in the 2010s, it makes perfect sense for Intel to raise money, especially after a five-fold increase in the stock price since last August," said Russ Mould, investment director at AJ Bell.
The shift toward AI agents has boosted demand for central processing units, adding to pressure on Intel's manufacturing capacity and helping drive a broader revival in demand for its chips. The company raised its capital expenditure forecast for this year to $20 billion from $18 billion in July.
Intel has also committed to high-volume production of chips using its 14A manufacturing process in 2028, after previously warning that the technology could be shelved if it failed to secure a major external customer.
Its foundry business has won Tesla as a customer for its 14A process, while optimism about securing another marquee customer grew after U.S. President Donald Trump said Apple would work with Intel to manufacture chips in the United States. Neither company has confirmed such an agreement.
Last month, Intel announced a €5 billion ($5.77 billion) investment to upgrade and expand chip manufacturing in Ireland, a project that represents more than a quarter of its planned 2026 capital spending.
The new share sale gives Intel substantial additional capital as it attempts to rebuild its manufacturing business, while diluting existing shareholders after a year in which the company's stock has surged sharply.
