By Sam Boughedda
Intel (NASDAQ:INTC) announced Tuesday that it has signed an agreement with Brookfield Asset Management (NYSE:BAM) to invest up to $30 billion in chip factories in Arizona.
The Semiconductor Co-Investment Program (SCIP) between Intel and the infrastructure affiliate of Brookfield Asset Management is said to provide Intel with a new, extended pool of capital for manufacturing build-outs.
The SCIP is aimed at providing ways to fund growth while "creating further financial flexibility to accelerate the company's IDM 2.0 strategy," Intel said.
The agreement with Brookfield comes following the companies' memorandum of understanding announced in February, and it will see the companies jointly invest up to $30 billion in Intel's manufacturing expansion at its Ocotillo campus in Chandler, Arizona. Intel will fund 51% and Brookfield will fund 49% of the project cost, with Intel retaining majority ownership and operating control of the two new chip factories in Chandler.
Intel said in its statement that over the next several years, the structure is expected to provide a $15 billion cumulative benefit to its adjusted free cash flow.
The deal with Brookfield is expected to close by the end of 2022.
Intel shares gained over 1% in early Tuesday trading.