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Intel, Brookfield Establish Investment Strategy for Semiconductor Manufacturing; David Zinsner Quoted

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Intel Corporation, the multinational manufacturer of microprocessors, has teamed with Brookfield Asset Management to create an investment initiative for semiconductor production.

The Semiconductor Co-Investment Program puts forward a new financial model to accelerate semiconductor chip construction in Arizona-based facilities through a $30 million joint offering from Intel and Brookfield, the Santa Clara-headquartered company said Tuesday.

“This landmark arrangement is an important step forward for Intel’s Smart Capital approach and builds on the momentum from the recent passage of the CHIPS Act in the U.S.,” remarked David Zinsner, chief financial officer of Intel.

Zinsner also said SCIP is an untested strategy for the industry that is intended to enable flexibility in the company’s activities as well as promoting an equivocal, strong supply chain.

In this way, SCIP is an outgrowth of Intel’s Smart Capital endeavor, which seeks to make progress on its IDM 2.0 efforts in a financially stable and forthright manner. The companies’ joint funds will be applied toward Intel’s Chandler, Arizona Ocotillo campus, which is undergoing renovation and additions. Since Intel is pledging 51 percent of the $30 billion, it will continue to be the majority owner and operator of the pair of chip factories under construction.

Ultimately, the arrangement is projected to incur $15 billion worth of cumulative benefit for Intel’s adjusted free cash flow as well as accretive to its earnings.

According to Intel, the new agreement between Intel and Brookfield is seen as a demonstration of how private capital can be a “force multiplier for government incentives for the semiconductor manufacturing expansion” in the wake of the signing into law of the CHIPS and Science Act of 2022.