Intel Plans $15 Billion Share Sale to Fund Foundry Expansion as Stock Surge Continues

Intel announced on Monday its intention to raise $15 billion through a share sale, capitalizing on a dramatic stock rally driven by its turnaround strategy to finance the costly expansion of its chip contract manufacturing business. The move marks a pivotal step for the once-dominant chipmaker as it seeks to reclaim ground lost to rivals like TSMC in the fiercely competitive foundry market.

The company has been channeling substantial resources into new fabrication facilities and advanced packaging technologies, aiming to position itself as a credible alternative for customers seeking cutting-edge chip production. Intel's shares have nearly tripled this year, far outpacing competitors AMD and Nvidia, as well as the Philadelphia Semiconductor Index's roughly 75% gain, reflecting growing investor confidence in its restructuring efforts.

Bloomberg News reported, citing sources familiar with the matter, that Intel may increase the offering to approximately $20 billion and could price shares at $95 or higher, a discount of about 2.6% to Monday's close of $97.52. The report also indicated that investor demand has surpassed $100 billion, and the deal could exceed $20 billion if the over-allotment option is fully exercised. Reuters could not immediately verify these details, and Intel declined to comment outside regular business hours.

The equity raise comes as Intel intensifies its push into AI-driven computing, where demand for central processing units has outstripped its current manufacturing capacity. In July, the company raised its capital expenditure forecast for this year from $18 billion to $20 billion, underscoring the scale of its ambitions. Intel has also committed to high-volume production using its 14A manufacturing process by 2028, a technology it had previously warned could be shelved without a major external customer.

The foundry unit has already secured Tesla as a 14A customer, and optimism for additional marquee clients grew after U.S. President Donald Trump said Apple would produce processors with Intel, though neither company has confirmed the arrangement. Last month, Intel announced a €5 billion ($5.77 billion) investment to upgrade and expand chip manufacturing in Ireland, a project representing more than 25% of its planned 2026 capital spending.

"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 share sale, managed by JPMorgan Securities, Goldman Sachs, Morgan Stanley, and Citigroup Global Markets as joint book-running managers, includes a 30-day option for underwriters to purchase up to $2.25 billion in additional shares at the offer price, minus discounts. Analysts suggest that Intel's surging valuation has created a favorable window for raising capital, which could provide the financial firepower needed to sustain its ambitious roadmap and compete effectively in the global semiconductor landscape.