[Asia Economy Reporter Jeong Hyunjin] "It is a new capital-raising model for the capital-intensive semiconductor industry."
This was mentioned when the U.S. semiconductor manufacturer Intel announced in August last year that it would invest $30 billion (approximately 36.75 trillion KRW) in its Arizona plant. This expression refers to the partnership formed by jointly investing funds necessary for factory construction with the global asset management firm Brookfield Asset Management and sharing the profits. Intel named this collaboration the "Semiconductor Co-Investment Program (SCIP)."
Bloomberg News reported on the 2nd (local time) that "Intel's semiconductor factory investment has prompted banks to look for similar deals." Citing sources, Bloomberg said Intel has already contacted private investment firms seeking to form partnerships related to the construction of plants in Ohio, USA, and Germany. Intel CEO Pat Gelsinger also mentioned last month that a second SCIP could be launched within the year.
In the case of Brookfield, which invested funds in the existing SCIP, it reportedly contributed $2 billion of equity capital and borrowed $13 billion from overseas banks, pension funds, and sovereign wealth funds. When this investment plan was announced in August last year, Intel described Brookfield's expected returns as "somewhere between the cost of debt and equity," estimating it to be around 4-8.5%.
However, semiconductor investments carry significant risks for infrastructure investors due to the need for cutting-edge technology. Bloomberg reported that unlike other infrastructure co-investments where profits and losses are shared equally, in Intel's case, the contract was structured so that Intel bears more of the losses and receives more of the profits. This arrangement allows Intel to halve the expenses on its financial statements, maintain its credit rating, and secure capital, but the guarantees Intel provides to Brookfield are likely to be recognized as debt. Bloomberg added that if similar funding methods continue, Intel's credit rating could also be affected.
Bloomberg analyzed that Intel's investment partnership is expanding the scope of infrastructure co-investments. Infrastructure investments, which were originally limited to roads and ports, are gradually expanding to data centers, semiconductor factories, and network construction. Especially in North America and Europe, where investments are being strengthened to reduce semiconductor dependence on East Asia, this case shows how private investment firms can participate, Bloomberg reported.
Scott Peak, Brookfield's Chief Investment Officer (CIO) for North America, estimated that the funds needed for sectors Brookfield is considering as large-scale core manufacturing facilities?including semiconductors, aviation, automobiles, gigafactories, data centers, and telecommunications?would be around $1 trillion. He said, "There are many well-established infrastructure categories that were not on investors' radar five or ten years ago," adding, "As new asset classes emerge, new models are coming out."
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