Intel Doubles Down On Chips, Enters $30 Billion Deal To Build New Factory
August 24 2022 - 8:32AM
NEWSBTC
Intel is not done yet. The company’s plan to become a big player in
the semiconductor business is even more ambitious than we thought.
Today’s news arrives via the WSJ, “Intel Corp. has struck an
unusual $30 billion funding partnership with Brookfield Asset
Management Inc.” Both companies will finance and build a new
factory in Chandler, Arizona. Apparently, this is the first of many
similar deals for Intel. The company wants to build chip
manufacturing capabilities fast and it’s using this co-investment
as a way to raise money outside of the traditional banking system.
For its part, Brookfield is a Canadian asset-management firm that
has “more than $750 billion in assets under management.” If this
goes well, these new pools of capital will allow Intel to build
factories in other places. In this case, Intel will fund 51% of the
new facility and thus have “a controlling stake in the financing
vehicle that would own the new factories.” Brookfield will finance
and own the rest, and both companies “will split the revenue that
comes out of the factories.” The deal would be “the first of what
could be a series of such arrangements Intel pursues to underpin
Chief Executive Pat Gelsinger’s push to make the company a leading
contract chip maker and regain its manufacturing advantage over
competitors in Taiwan and South Korea.” What Does Intel ’s Chip
Business Have To Do With Bitcoin? These chips are a crucial part of
the Blockscale ASICs, Intel’s “energy efficient” Bitcoin miners. In
fact, before Intel, all Bitcoin miners were practically dependent
on the Taiwan and South Korea factories. When the Blockscale
shipped, we quoted Raja Koduri, Intel’s Architecture, Graphics and
Software (IAGS) division’s senior vice president: “Intel AXG Custom
Compute team is now shipping the Blockscale ASIC! First product
will always be unforgettable, congratulations team. Excited to see
how Argo, Griid and Hive improvise around Blockscale and our open
design.” Before that, we quoted Intel ‘s CEO Pat Gelsinger
overselling it a bit: “Intel is about to bring forward a blockchain
chip that’s dramatically better. That is orders of magnitude better
in terms of power performance. So, we’re helping solve the climate
issue.” We even quoted President Joe Biden poetically describing
Intel ’s other chip factory: “If you travel 20 miles east of
Columbus, Ohio, you’ll find 1,000 empty acres of land. It won’t
look like much, but if you stop and look closely, you’ll see a
‘field of dreams,’ the ground on which America’s future will be
built.” BTC price chart for 08/24/2022 on Bitstamp | Source:
BTC/USD on TradingView.com There’s No Business Like The Chip
Business Back to the WSJ report, the numbers that Intel ‘s CEO is
expecting for all of this hassle are astronomical: “Mr. Geslinger
and other industry officials have said they expect annual
semiconductor sales to roughly double by the end of the
decade—topping $1 trillion—even if short-term demand softness is
weighing on chip-industry earnings.” They are betting big, “Intel
also has said it could spend as much as $100 billion each on new
plant complexes in Ohio and Germany.” And they’re not the only
ones, Taiwan and South Korea are also doubling down on
semiconductors, and even The European Union is trying to get in on
the action. In Intel ´s case, the already mentioned President Biden
might have something to do with all of these investments: “In the
U.S., whose share of the chip market has fallen to about 12%,
according to Boston Consulting Group, President Biden this month
signed legislation allocating more than $50 billion for domestic
chip manufacturing and research. Intel and other chip manufacturers
lobbied heavily for the bill. The European Union is considering
incentives to double its share of global chip-making to 20% by
2030.” Is this good for bitcoin, though? Everything is good for
bitcoin. Having more chip options for the new generation of bitcoin
miners that’s coming down the pipeline is even more so. Featured
Image by Kevin Woblick on Unsplash | Charts by TradingView
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