Intel To Buy Tower Semiconductor for $5.4 Billion
Chip maker Intel announced on Tuesday its plans to acquire Israel-based Tower Semiconductor for $5.4 billion.
Tower Semiconductor specializes in manufacturing integrated circuits using specialty process technologies. Intel said the acquisition will help strengthen its manufacturing expansion initiative called IDM (integrated device manufacturing) 2.0, which the company detailed last year.
Speaking on the pending acquisition, Pat Gelsinger, Intel CEO, made the following comment:
Tower's specialty 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 specialty technologies on mature nodes -- unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors.
Going further into detail on how the acquisition of Tower Semiconductor fits into the company's IDM 2.0 strategy, Intel said the latest move fits in with Intel Foundry Services' goals of improving the worldwide semiconductor supply with key manufacturing initiatives. On that same note, Intel announced plans last month to invest more than $20 billion to establish two new chip factories in Ohio. These two moves are seen to counter the growing dominance in the industry of major manufacturers like Samsung and Taiwan's TSMC.
Tower Semiconductor's chips and circuits have been widely used in consumer products, automotive technology and medical equipment. The company's CEO, Russell Ellwanger, said the deal, which has already been approved by both companies' boards, will help write the next chapter for Tower Semiconductor.
"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," said Ellwanger.
The deal is expected to close in 12 months. Until then, Ellwanger will continue to lead Tower Semiconductor. Once finalized, the company will be absorbed as another piece in Intel's foundry business.