Brookfield Infrastructure agrees to co-fund Intel Arizona chip fab

Aug. 23, 2022
Under what Intel is calling its Semiconductor Co-Investment Program (SCIP), Brookfield will acquire a 49% stake in the Ocotillo campus expansion project.

Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN) and its institutional partners have agreed to co-fund Intel’s expansion of the chipmaker’s semiconductor fabrication facility located in Chandler, AZ. Under what Intel is calling its Semiconductor Co-Investment Program (SCIP), Brookfield will acquire a 49% stake in the Ocotillo campus expansion project. The transaction should close by the end of this year, subject to customary closing conditions.

Brookfield adds that it has secured binding non-recourse financing to fund “a significant portion” of its investment. The company’s equity portion for this investment will be phased over the duration of the construction period and is anticipated to be $500 to $750 million in aggregate. Brookfield expects its funding portion to be sourced primarily from retained operating cash flow and proceeds from its capital recycling program, with the majority funded closer to facility commissioning.

“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, Intel CFO. “Semiconductor manufacturing is among the most capital-intensive industries in the world, and Intel’s bold IDM 2.0 strategy demands a unique funding approach. Our agreement with Brookfield is a first for our industry, and we expect it will allow us to increase flexibility while maintaining capacity on our balance sheet to create a more distributed and resilient supply chain.”

“By combining Brookfield's access to large-scale capital with Intel’s industry leadership, we are furthering the advancement of leading semiconductor production capabilities,” added Sam Pollock, CEO of Brookfield Infrastructure. “Leveraging our partnership experience in other industries, we are pleased to come together with Intel in this important investment that will form part of the long-term digital backbone of the global economy.”

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.

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