The industry's first SCIP agreement, Intel chip factory received 30 billion US dollars investment

（The picture comes from the Internet）

　　In the face of tens of billions of dollars in investment in chip manufacturing plants, Intel has come up with a way to maximize the efficiency of capital expenditures: pull in asset management giants to join in and invest together.

　　On August 23, local time, Intel announced that it signed the industry's first Semiconductor Joint Investment Project (SCIP) agreement with Brookfield, Canada. The two parties will jointly invest $30 billion to build Chandler, Arizona. The city's chip factory expansion plan is expected to complete the investment by the end of the year.

　　According to the agreement, the investment involves the construction of two new chip factories, of which Intel will invest 51% and Brookfield Asset Management will invest 49%, which also means that Intel will continue to hold a majority stake and operational control of the chip factory. For Canadian asset management, in addition to getting the equity of the chip factory, it can also share nearly half of the future operating profits of the two advanced factories.

　　Scott Peak, a partner in Brookfield's capital management infrastructure department, said similar agreements are very common in energy, telecommunications and other fields, and are now also coming to the semiconductor industry with growing capital needs. As a $750 billion asset management giant, the company's ability to handle large and complex transactions fits well with Intel's deal.

　　For Intel, which is trying to catch up with TSMC and Samsung, the transaction can also greatly reduce the burden of capital investment. Intel CFO David Zinsner said the advantage of working with Canadian asset management is that it will not burden the balance sheet and help the company achieve its goal of 20% of revenue in free cash flow. The company has fallen behind its competitors, so aggressive investments are needed in the coming years.

　　The current intensifying inflation situation has also put a test on the wealth of each chip factory. Intel initially announced an expected investment of $20 billion for the Arizona factory expansion, but Zinsner emphasized that this was an early expectation, and inflation has pushed up construction costs.

　　Intel has also previously said that the overall investment in new factories in Ohio and Germany may reach 100 billion US dollars. For reference, rival Samsung Electronics has also announced a three-year $205 billion investment plan. So Zinsner believes that the company will make several investment agreements similar to today's.

　　Behind the substantial investment is also the expectation of rapid growth in the semiconductor industry. Many industry leaders, including Intel CEO Geelsinger, believe that annual semiconductor sales can double to nearly $1 trillion by 2030, even if the short-term demand trend is not optimistic.

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