Intel plans $15 billion share sale as turnaround rally lifts stock

Aug 10 (Reuters) - Intel on Monday said it is planning to raise $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 fueled 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 TSMC in contract chip manufacturing.

Its shares fell more than 4% in early trading, likely on shareholder dilution concerns. As of last close, the stock has nearly tripled this year, outperforming rivals AMD and Nvidia and the Philadelphia Semiconductor Index's nearly 75% rise.

Several analysts have said Intel's surging share price has increased the chances of an equity raise to help fund its expansion plans.

The shift toward AI agents has powered demand for central processing units beyond Intel's manufacturing capacity, prompting the chipmaker to raise its capital expenditure forecast for this year from $18 billion to $20 billion in July.

It also committed to high-volume production of chips using its 14A manufacturing process in 2028, after previously warning 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 U.S. President Donald Trump said Apple would make processors with Intel, though neither company confirmed it.

Last month, Intel announced a 5 billion euro ($5.77 billion) investment to upgrade and expand chip manufacturing in Ireland, a project that represents more than 25% of its planned 2026 capital spending.

Intel plans to give underwriters a 30-day option to buy up to $2.25 billion worth of additional shares at the offer price, minus discounts.

JPMorgan Securities, Goldman Sachs, Morgan Stanley and Citigroup Global Markets are acting as joint book-running managers.

($1 = 0.8659 euros)

(Reporting by Anhata Rooprai in Bengaluru; Editing by Joyjeet Das and Arun Koyyur)