Brookfield Pays $15B For Stake In Intel Chip Factories

Brookfield Asset Management's infrastructure affiliate finalized a deal with chip-making giant Intel to invest about $15B to expand Intel's Ocotillo campus in Chandler, Arizona.

With Brookfield funding 49% of the total project cost, Intel will retain majority ownership with 51%, and operating control of the two new chip factories, which the tech company says will support long-term demand for its products.

The Ocotillo campus is the company’s first "mega-factory network," currently with four factories connected via a mile-long automated highway. With the addition of two new chip fabrication plants, the Arizona site will become Intel’s largest manufacturing site in the world, covering about 700 acres.

The company didn't release a precise timetable for the full build-out, though it did say the two factories would create around 3,000 Intel jobs, along with about 3,000 construction jobs over the course of the build.

The agreement comes not long after President Joe Biden signed the CHIPS and Science Act into law, which included about $52.7B in subsidies for U.S. semiconductor production. Intel had announced the expansion earlier in the year, however, in response to the ongoing international chip shortage.

Still pending in Congress is the FABS Act, which would allow a new tax credit for investment in a chip manufacturing facility.

Chip manufacturing capacity in the U.S. has dropped from 37% of the world's total in 1990 to 12% now, according to the Semiconductor Industry Association, which asserts that other governments have invested ambitiously in chip manufacturing incentives over that period, while the U.S. has not.

Also, federal investments in chip research have held flat as a share of GDP over that period, while other countries have increased research investments, according to the association.

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