The planned equity offering comes as Intel pours billions of dollars into new production facilities, advanced packaging technology and next-generation manufacturing processes in an effort to rebuild its position in the global semiconductor industry and compete more directly with contract manufacturing leader TSMC.
Intel shares fell more than 4% in early trading following the announcement. Despite the decline, the company's stock has nearly tripled this year, significantly outperforming rivals AMD and Nvidia, as well as the Philadelphia Semiconductor Index, which has gained nearly 75%.
The dramatic rise in Intel's share price has encouraged analysts to expect the company to tap the equity markets to help finance its ambitious expansion programme.
"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.
AI demand boosts Intel's investment plans
The rapid growth of artificial intelligence and the increasing use of AI agents have helped drive demand for computing power, including central processing units, putting additional pressure on Intel's manufacturing capacity.
In July, the company raised its capital expenditure forecast for the year from $18 billion to $20 billion as it works to expand production and strengthen its manufacturing capabilities.
Intel has also made a major commitment to its next-generation 14A manufacturing process. The company said it intends to begin high-volume production using the technology in 2028, reversing earlier concerns that the process could be shelved if Intel failed to secure a major outside customer.
The move is particularly important to Intel's strategy for its foundry business, which is designed to manufacture chips for other companies rather than only producing Intel's own processors.
Tesla and Apple add to foundry optimism
Intel's foundry division has already secured Tesla as a customer for its 14A process, providing an important boost to the company's efforts to establish itself as a credible alternative to TSMC.
Optimism about attracting another major customer also increased after U.S. President Donald Trump said Apple would manufacture processors with Intel. However, neither Apple nor Intel has confirmed the reported arrangement.
Winning high-profile customers is considered crucial to Intel's plans because its foundry strategy requires significant upfront investment before the business can generate substantial returns.
The company is also expanding its manufacturing footprint outside the United States. Last month, Intel announced a €5 billion ($5.77 billion) investment to upgrade and expand its chip manufacturing operations in Ireland.
The Irish project represents more than 25% of Intel's planned capital spending for 2026, underscoring the scale of investment required to rebuild its manufacturing operations.
Share sale gives Intel more financial flexibility
Under the proposed offering, Intel's underwriters will also receive a 30-day option to purchase up to an additional $2.25 billion worth of shares at the offering price, less applicable discounts.
JPMorgan Securities, Goldman Sachs, Morgan Stanley and Citigroup Global Markets are serving as joint book-running managers for the share sale.
The fundraising will give Intel additional financial flexibility as it attempts to balance the enormous costs of expanding semiconductor manufacturing with the need to strengthen its balance sheet.
The challenge for Intel is that advanced chip manufacturing requires enormous amounts of capital and years of investment before new facilities and processes can reach full-scale production.
Still, the company's recent stock rally has provided an opportunity to raise substantial funds while investor confidence in its turnaround strategy remains elevated.
Intel is now attempting to turn that renewed investor optimism into a manufacturing comeback, with the success of its foundry business likely to determine whether it can regain a more influential position in the global semiconductor market.