Intel said where it will take tens of billions of
Hardware

Intel said where it will take tens of billions of dollars for new businesses

In August, Intel entered into an agreement with Canadian company Brookfield Asset Management to jointly finance the construction of new chip factories in Arizona. The partners will have to share the cost almost equally, totaling $30 billion. This week, Intel’s finance director made it clear that a similar scheme would be applied in the future, along with subsidies companies can reach the same cost level as Asian competitors.

    Image source: Intel

Image source: Intel

David Zinsner commented on this conferences Credit Suisse, where he represented the interests of Intel Corporation. The CFO emphasized that from the management point of view the company retains the majority of votes on this project and the presence of such a financial partner will reduce the negative impact of fluctuations in its own cash flows on the implementation of the investment program. This collaboration should be just one of many to come. Intel will involve both existing and new partners in such joint financing, where a high level of interest in this topic can already be felt. As Zinsner added, financial advisers regularly approach Intel’s management with new proposals of this kind.

The possibility of additional funding sources is very encouraging for Intel. In fact, according to Zinsner, the company is not only innovative in terms of technology, but also when it comes to finding sources of financing. Intel’s investment program for the coming years is too large for the company to meet its funding needs from its traditional sources alone.

At the same time, Intel’s finance director is aware of the difference in the cost of building and starting a business in Asia and the United States. In the latter case, the corresponding projects are more expensive. Asian authorities provide certain subsidies to investors setting up businesses in the region. With the passage of the so-called “Chip Act” by the US authorities, Intel has the opportunity to achieve a comparable level of its own costs when building companies in the USA compared to projects carried out in Asia. David Zinsner also commended Intel CEO Patrick Gelsinger for lobbying the US government to get the law passed. In addition, the willingness of the European authorities to pass a similar legislative package is also a credit to Gelsinger, according to his colleague. But even with subsidies and tax breaks, the scale of Intel’s manufacturing base expansion will require huge investments in the years to come.

David Zinsner is convinced that Intel can outperform the competition in the area of ​​chip manufacturing not only technologically, but also in terms of costs. In the latter case, the vertical integration of the business will help reduce the cost of Intel products, according to the finance director. Customer engagement can serve as an indicator of confidence in Intel’s technology capabilities, Zinsner said. According to him, seven of the ten largest factoryless customers in the world are already involved in negotiations with Intel at one point or another. MediaTek is just one of them, Intel’s management will be ready to name the others as soon as progress is made in this area.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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