Brookfield backs Intel’s $30 billion chip move to the US

Intel has revealed that Brookfield Asset Management was the first company to participate in what the company said is a new approach to financing chip factories, as it advances a plan to boost domestic production.

The chipmaker’s Semiconductor Co-Investment Program (SCIP) aims to expand the pool of capital available to fund factory construction.

Intel and Brookfield Asset Management have agreed to jointly invest up to $30 billion in factories in the state of Arizona, first announced in 2021.

Brookfield Asset Management will own a 49% stake in the joint venture, with Intel owning the majority stake and operating control of the plants.

Intel Chief Financial Officer David Zinsner said the arrangement between the companies built on the momentum of the recent passage of the CHIPS and Science Act in the United States and noted that semiconductor manufacturing was one of the most capital-intensive industries in the world.

Over the next few years, the partnership is expected to add $15 billion in cumulative earnings to Intel’s adjusted free cash flow and increase earnings per share during construction and expansion periods.

The transaction is expected to close by the end of the year, subject to customary closing conditions.

Pat Gelsinger, CEO of Intel (illustrated) announced multi-billion investments in the US and Europe in 2021, but the supplier later reportedly suspended construction of a $20 billion facility in Ohio due to delays in the US in adoption of funding legislation.

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Casey J. Nelson