Intel Corp. and Canada’s Brookfield Asset Management have signed a deal together to contribute up to $30 billion to the cutting-edge chip factories that the American chipmaker is building in Arizona. This agreement will support Intel’s goal of increasing domestic chip production without negatively impacting its balance sheet.
The infrastructure subsidiary of Brookfield will contribute up to $15 billion for a 49% investment in the expansion project, while Intel would maintain majority ownership and operational control over the two Chandler, Arizona, chip plants intended to produce advanced chips.
Specific terms weren’t disclosed by the two businesses. The interest rate, which is higher than debt financing but lower than equity financing, is between 4.4% and 8.5%, according to Intel’s finance director David Zinsner.
Zinsner anticipates that the semiconductor industry will test a number of funding schemes similar to this one in the future.
The agreement also follows this month’s signing of the CHIPS and Science Act into law by US President Joe Biden, which includes $52.7 billion in subsidies for US semiconductor production and research.