Intel (NASDAQ:INTC) stock is in the news today after the company announced its co-investment into Arizona semiconductor factories.
This is through its Semiconductor Co-Investment Program (SCIP). The company signed an agreement with Brookfield Asset Management’s (NYSE:BAM) infrastructure affiliate to build capital and help fund the creation of new chip factories. This will see Intel obtaining the funding by the end of the year.
The company is planning to expand its Ocotillo campus in Chandler, Arizona with new facilities for semiconductor production. This will have it funding 51%. The remaining 49% will be funded by Brookfield Asset Management.
Intel notes that it will maintain majority control of two new chip factories in Chandler. These factories will support the company’s long-term demand for its products, as well as demand from Intel Foundry Services (IFS) customers.
CFO David Zinsner said the following about the funding deal:
“Our agreement with Brookfield is a first for our industry, and we expect it will allow us to increase flexibility while maintaining capacity on our balance sheet to create a more distributed and resilient supply chain.”
Intel’s commitment to manufacturing more semiconductors will likely benefit INTC stock in the long term. There’s an increasing demand for chips as technology advances, the rising demand for electric vehicles (EVs) being a prime example.
INTC is up 1.3% as of Tuesday morning!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.