Intel is breaking new ground in raising capital for the expansion of its Ocotillo Campus in Chandler (Arizona) and is thus making a new attempt to maintain its technological and economic leadership position.
With the illustrious name 'Semiconductor Co-Investment Program' (SCIP), Intel is joining forces with the Canadian asset manager and major investor Brookfield Asset Management, in the form of its Brookfield Infrastructure division. Both partners want to jointly invest 30 billion dollars in Intel's current fab project in Chandler in order to raise sufficient capital for the expansion of production. A definitive agreement based on a memorandum of understanding dated February 2022 was signed in August. It should be completed by the end of the year.
This is also a historic first for the highly innovative chip industry and is due to the growing capital requirements for new chip and wafer factories with the finest structural dimensions and complex architectures. SCIP plays the leading role in Intel's so-called Smart Capital concept, which provides the financial resources with the necessary flexibility for Intel's IDM 2.0 strategy. Under the name Intel Foundry Services (IFS), it also includes the development of contract manufacturing for users and competitors.
Important step for Intel's smart capital concept
Intel itself is taking over 51% of the investment sum, Brookfield 49%. This gives Intel a nominal majority of the shares and control of the two new chip factories (Fab 52 and 62) planned in Chandler. "This arrangement is an important step for Intel's smart capital concept", explains Intel CFO David Zinsner "It builds on the recently installed US Chips Act. Intel's IDM 2.0 strategy requires a specific approach to financing. Our agreement with Brookfield is a first for our industry." Brookfield Infrastructure is a global infrastructure developer that owns and manages assets in energy, transportation and data centers in the Americas, Asia-Pacific and Europe.
In addition to the new co-investment program SCIP, Intel's innovative Smart Capital concept also includes: Smart Capacity Investments, i.e. the cost-effective construction of initially empty production halls (shell space), which can be expanded quickly if required. Government support measures are to be used for new production infrastructures both in the USA (through the Chips and Science Act of 2022 just passed by Congress) and in Europe (through the planned EU Chips Act). Intel also intends to continue using external chip foundries wherever they can support its own products with technological expertise.
