Summary
Intel Corporation has entered into a significant definitive agreement with Brookfield, an entity managed by affiliates of Brookfield Asset Management, to jointly own and develop two new semiconductor wafer fabrication buildings on Intel's Ocotillo campus in Arizona. This joint venture, named NewCo, will be initially 51% owned by Intel and 49% by Brookfield, with Intel contributing approximately $14.8 billion in assets and cash, and Brookfield contributing approximately $14.2 billion in cash. This transaction is a key step in Intel's strategy to leverage its manufacturing capabilities and is expected to close in the fourth quarter of 2022, subject to regulatory approvals, including CFIUS. The agreement grants Intel significant governance rights over NewCo, including the ability to appoint a majority of the board managers. While Intel will retain operational responsibility for constructing, commissioning, operating, managing, and maintaining the project, the co-investment structure aims to accelerate Intel's manufacturing expansion and potentially improve capital efficiency. This strategic move signals Intel's commitment to its foundry ambitions and its approach to funding large-scale capital projects through partnerships.
Key Highlights
- 1Intel enters a material definitive agreement with Brookfield to form a joint venture (NewCo) for two new semiconductor fabrication buildings in Arizona.
- 2Intel will own 51% of NewCo, and Brookfield will own 49%, with initial contributions of $14.8 billion from Intel and $14.2 billion from Brookfield.
- 3The joint venture aims to accelerate the development and operation of Intel's Ocotillo campus facilities.
- 4Intel retains significant governance and operational control over NewCo.
- 5The transaction is expected to close in the fourth quarter of 2022, pending customary closing conditions, including CFIUS approval.
- 6A termination fee of $250 million is applicable under certain conditions if the closing does not occur by February 22, 2023.