Post-acquisition, Tower Semiconductor will be integrated into Intel Foundry Services with an aim to create a globally diverse end-to-end foundry to help cope up with the rising demand for semiconductors
Tower Semiconductor agrees to be acquired by Intel in an all-cash deal. (Credit: Tower Semiconductor/Wikimedia Commons)
Intel has agreed to acquire Tower Semiconductor, an Israel-based foundry for analogue semiconductor solutions, in a deal worth around $5.4bn.
As per the terms of the deal, Intel will pay $53 per share in cash to the shareholders of the publicly-listed Israeli firm.
According to Intel, the acquisition advances its IDM 2.0 strategy considerably. Under the strategy announced last year, Intel has been aiming to further grow its manufacturing capacity, global presence, and technology portfolio to address the high industry demand for semiconductors.
Post-acquisition, Tower Semiconductor will be integrated into Intel Foundry Services.
Intel CEO Pat Gelsinger said: “Tower’s speciality technology portfolio, geographic reach, deep customer relationships and services-first operations will help scale Intel’s foundry services and advance our goal of becoming a major provider of foundry capacity globally.
“This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated speciality technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors.”
Tower Semiconductor is said to have expertise in speciality technologies like radio frequency (RF), power, silicon-germanium (SiGe), and industrial sensors.
In addition to the technologies, the firm’s IP and electronic design automation (EDA) partnerships and foundry footprint are expected to give broad coverage to Intel and Tower Semiconductor’ customers around the world.
The Israeli firm caters to high-growth markets such as mobile, power, and automotive.
Intel said that Tower Semiconductor’s foundry presence is geographically complementary. The latter has facilities in the US and Asia that serve fabless companies and integrated device manufacturers (IDMs).
Tower Semiconductor is said to offer over two million wafer starts per year of capacity, said Intel.
The Israeli firm also has chip manufacturing facilities in its home country and Japan besides a new fab that is slated to be operational in Italy in the second half of this year.
Tower Semiconductor CEO Russell Ellwanger said: “With a rich history, Tower has built an incredible range of speciality analogue foundry solutions based upon deep customer partnerships, with worldwide manufacturing capabilities. I could not be prouder of the company and of our talented and dedicated employees.
“Together with Intel, we will drive new and meaningful growth opportunities and offer even greater value to our customers through a full suite of technology solutions and nodes and a greatly expanded global manufacturing footprint.”
The deal, which is subject to approval from Tower Semiconductor’s stockholders, regulatory approvals, and other conditions, is expected to close in nearly 12 months.