Intel to acquire Tower Semiconductor for $5.4 billion
The chipmaker says the deal will unlock new opportunities in an era of "unprecedented demand" for semiconductors
Intel has announced that it has entered into an agreement to acquire Tower Semiconductor for $5.4 billion (£3.98 billion).
Founded in 1993, Tower Semiconductor is an Israeli public company that manufactures chips for the mobile, automotive, and power industries. With factories based in Japan, Texas, and Italy, the locations have been deemed “geographically complementary” to Intel.
The deal, which is part of Intel’s “integrated device manufacturing (IDM) 2.0 vision”, will see the chipmaker pay $53 (£39) per Tower share in cash, with a total enterprise value of around $5.4 billion (£3.98 billion).
Announced in March 2021, IDM 2.0 is a $20 billion (approximately £14.5 billion) initiative that aims to expand Intel’s own manufacturing plans, alongside manufacturing custom chips for other tech firms, in an effort to revitalise Intel’s business after a difficult 2020.
This includes the construction of new chip factories in Arizona and Ohio as it bids to serve foundry customers around the globe.
Commenting on the announcement, Intel CEO Pat Gelsinger said that the deal will enable Intel to offer a "compelling breadth of leading-edge nodes and differentiated speciality technologies on mature nodes”.
This, in turn, is expected to unlock “new opportunities for existing and future customers in an era of unprecedented demand for semiconductors”.
“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,” he added.
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Tower CEO Russell Ellwanger said that he “could not be prouder of the company and of [Tower’s] talented and dedicated employees”. However, he did not provide details on whether the acquisition will see Tower retain its estimated 5,500 staff.
“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. We look forward to being an integral part of Intel’s foundry offering,” he added.
Forrester VP research director Glenn O’Donnell said that the acquisition comes as "no surprise":
"Intel has demonstrated it is serious about rebuilding its manufacturing capabilities and the Tower deal fills an important void," he told IT Pro.
News of Intel's acquisition of Tower comes just hours after AMD announced that it had completed its takeover of FPGA heavyweight Xilinx.
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