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Brookfield, Intel Partner on $30B Investment in Chip Plants

Brookfield Asset Management is partnering up with chip maker Intel to invest up to $30 billion in new fabrication plants in Arizona. Through its affiliate Brookfield Infrastructure Partners, the company has agreed to invest $15 billion in Intel’s under-construction semiconductor plant in Chandler, Ariz., equating to a 49 percent stake in the project. The investment will span several years and will also go toward future plant projects in the state. Executives at Intel called the agreement the first of its kind for the chip industry. “This landmark arrangement is an important step forward for Intel’s Smart Capital approach and builds on the momentum from the recent passage of the CHIPS Act in the U.S.,” said Intel CFO David Zinsner in the announcement.

The deal comes two weeks after President Biden signed the CHIPS Act into law, a bill aimed at bolstering semiconductor development and research nationwide and helping make the US less dependent on chips made in China and Taiwan. Partnerships like Brookfield and Intel’s could help cut the buildout cost to develop chip plants, and could lead to more projects in the pipeline around the country. New plants are much-needed, as the world is still in the midst of a chip shortage caused by the ongoing pandemic.

Semiconductor projects, which typically cost billions of dollars, can be a boon for real estate markets, leading to a “cascading impact” on local economies and logistics markets, said CBRE’s John Morris. Chip makers are often offered tax breaks and grants by state and local governments to choose their town to build a project in. Intel was offered around $2 billion in incentives to build its $20 billion chip plant near Columbus, Ohio, that will create 20,000 jobs. Last month, Samsung began applying for tax breaks for nearly a dozen potential chip plants in Texas that would total $192 billion in investments. The South Korea-based company chose the Austin-area town of Taylor to build a $17 billion chip plant last year, a project that is anticipated to create 2,000 jobs. With so many jobs set to be created through the developments, it’s hard to imagine industrial and residential projects won’t be soon to follow.

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