U.S. semiconductor corporations Intel launched its first large paid-in capital increase since its 1971 listing to expand investment in artificial intelligence (AI) chips.
Intel disclosed on the 10th (local time) that it will pursue a $15 billion (about 2.12 trillion won) paid-in capital increase. This is the first time since its listing that Intel has undertaken a large public stock offering.
On the background of the paid-in capital increase, Intel said, "As customers make unprecedented investments in AI compute, a sustainable demand environment continues," and noted, "Advances in physical AI, dedicated chips, advanced packaging, and external wafers provide Intel with important growth opportunities."
Intel plans to deploy the funds secured through the capital increase into capital expenditures (CapEx) for AI infrastructure investments and working capital.
Earlier, in its second-quarter results announcement this year, Intel raised its annual capital expenditure outlook to $20 billion (about 2.83 trillion won). At the time, Intel said it would expand investments in equipment, clean rooms, and substrates to support growth in products and the foundry business through next year.
Through this capital increase, Intel plans to strengthen its financial structure and maintain an investment-grade credit rating to secure capacity for future growth investments. As a continuation of financial structure improvements pursued since the appointment of Chief Executive Officer (CEO) Lipbu Tan, some view it as a move to lower funding costs in future corporate bond issuances.
Investor demand is far exceeding the initial plan. Citing sources, Bloomberg reported that Intel is pushing to expand the capital increase to about $20 billion. Investor demand for this offering is said to have exceeded $100 billion (about 141 trillion won).
If the over-allotment option is exercised, the final size of the capital increase could far exceed $20 billion. The offering price is expected to be set around $95 per share, but the size and price of the offering are said to be not yet finalized.
JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Citigroup are underwriting the offering.
Since Tan became CEO, Intel has strengthened its financial structure by attracting external funds from the U.S. government and competitors such as Nvidia. This time, it is moving to secure additional firepower for AI and foundry investments through a large paid-in capital increase.
Concerns about dilution of existing shareholders' equity value due to the large new share issuance came to the fore, and Intel shares closed down 4.1% at $97.52 in regular trading on the 10th. Still, they are up 164% this year.