Intel Enters Semiconductor Co-Investment Agreement

Researched by Industrial Info Resources (Sugar Land, Texas)--Intel Corporation (NASDAQ:INTC) (Santa Clara, California) said Tuesday it has entered a definitive agreement with Brookfield Infrastructure Partners LP (NYSE:BIP) (Toronto, Ontario) that sets up a co-investment program in order to build out Intel's semiconductor manufacturing plants. The agreement includes a joint investment of up to $30 billion in Intel's expansion at its Ocotillo semiconductor manufacturing campus in Chandler, Arizona, just as President Joe Biden recently signed the CHIPS Act that includes billions in funding for U.S. chip manufacturers. Industrial Info is tracking more than $40 billion worth of Intel projects in the U.S.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list.

The Semiconductor Co-Investment Program (SCIP) is part of Intel's Smart Capital strategy--"which aims to provide innovative ways to fund growth," according to a press release announcing the agreement. In 2021, about 35% of Intel's capital expenditures were spent on infrastructure.

"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.," said David Zinsner, chief financial officer of Intel.

Sam Pollock, Brookfield Infrastructure's chief executive officer, added, "By combining Brookfield's access to large-scale capital with Intel's industry leadership, we are furthering the advancement of leading semiconductor production capabilities." Industrial Info is tracking $1.2 billion worth of U.S. project activity for Brookfield and its affiliates, although most of the activity is attributed to power generation--mostly from renewable sources. Click here for a full list of project reports.

As part of the agreement, Intel will fund 51% and Brookfield 49% of the total Ocotillo project cost, which involves constructing two new semiconductor manufacturing plants--bringing the number of total manufacturing facilities on the campus to six. According to Intel, the new plants will create more than 3,000 construction jobs. Subscribers can click here for a detailed project report. Intel will maintain majority ownership and operating control.

Intel broke ground on the project in September 2021, and the project is expected to wrap up in 2024. But at the time of the construction announcement, Intel Foundry Services (IFS) President Randhir Thakur penned an editorial for the company website that noted the U.S. semiconductor industry needs assistance from the federal government: "We have plans for continued investments in the United States, but we can't do it without government partnership to level the playing field ... We urge both chambers to send a bipartisan bill to President Biden aimed at bolstering American competitiveness and investing in advanced semiconductor manufacturing and R&D."

Congress delivered by passing the CHIPS Act--which Biden signed in early August--that includes more than $52 billion for U.S. computer chip manufacturers and billions of dollars in potential tax credits, plus funding for development of chip-related technologies. For more information on the legislation and other semiconductor projects in the U.S., see Industrial Info's August 2, 2022, article - CHIPS Act Finally Passes, and July 28, 2022, article - Bill to Inject Billions into U.S. Semiconductor Industry Nears Finish Line.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).