Intel chip manufacturing: Brookfield pumps $15 billion into semiconductor factories
In search of new capital, Intel founds the Semiconductor Co-Investment Program. Brookfield is the first to buy in for almost $15 billion.
Intel is looking for co-investors to build new fabs to manufacture chips for custom customers as part of Intel Foundry Services (IFS). Canadian asset manager Brookfield Asset Management is the first investor to join the newly established Semiconductor Co-Investment Program (SCIP).
Up to 14.7 billion US dollars can Brookfield 49 percent share in Intel’s two new semiconductor plants cost in Arizona. The whole thing then works like a joint venture, in which the two companies share the turnover. As the majority owner, Intel retains the designation rights and intellectual property.
The partnership only affects the two new semiconductor plants and not Intel Foundry Services as a whole. Intel announced the construction at the beginning of 2021 – at that time the company was still forecasting costs of 10 billion US dollars per semiconductor plant. In the meantime, however, the costs are said to have increased, especially for ASML’s lithography systems for exposing the chips.
Intel’s Semiconductor Co-Investment Program (SCIP) (2 images)
Intel retains 51 percent of new Arizona fabs. Intellectual property (IP), i.e. all technical secrets, remain with the company.
(Image: Intel)
Improved balance sheet
According to its own information, Intel is planning further such partnerships with other semiconductor plants with other investors. The company is thus solving a problem that would continue to have a massive impact on business figures: the investments in chip order manufacturing are a multi-billion bet on future demand for chips. Intel first has to prove that it can keep up with competitors like TSMC and Samsung.
With the SCIP, Intel now shares the risk with investors. In addition, Intel will polish up its own business figures in the future, since expenditure will decrease significantly. Intel is currently under pressure as sales collapsed due to the declining PC market and strong competition from AMD.
