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Intel to buy Tower Semiconductor for $5.4bn

Intel Corporation is set to acquire Tower for $53 per share in cash, totalling approximately $5.4 billion.

The deal is set to expand Intel's semiconductor manufacturing capacity, accelerating its aim of becoming a major provider of foundry services and capacity globally.

As part of its IDM 2.0 strategy, Intel established Intel Foundry Services (IFS) in March 2021 to help meet the growing global demand for semiconductor manufacturing capacity and to become a major provider of US- and Europe-based foundry capacity to serve customers globally.  

The Tower purchase brings together Intel’s innovative nodes and scale manufacturing with Tower Semiconductor’s speciality technologies to deliver advanced technology and manufacturing capabilities.

Tower’s specialty technologies, such as radio frequency (RF), power, silicon-germanium (SiGe) and industrial sensors, extensive IP and electronic design automation (EDA) partnerships, and established foundry footprint will provide broad coverage to both Intel and Tower’s customers globally.

Tower serves high-growth markets such as mobile, automotive and power. It operates a geographically complementary foundry presence with facilities in the US and Asia serving fabless companies as well as IDMs and offers more than 2 million wafer starts per year of capacity.

Dr Randhir Thakur, president of Intel Foundry Services, said: '[Intel's] decades of foundry experience, deep customer relationships and technology offerings will accelerate the growth of Intel Foundry Services. We are building Intel Foundry Services to be a customer-first technology innovator with the broadest range of IP, services and capacity. Tower and IFS together will provide a broad portfolio of foundry solutions at global scale to enable our customers’ ambitions.'

The transaction is expected to close in approximately 12 months. It has been unanimously approved by Intel’s and Tower’s boards of directors and is subject to certain regulatory approvals and customary closing conditions, including the approval of Tower’s stockholders.

IFS and Tower Semiconductor will run independently until deal closure; IFS will continue to be led by Dr Randhir Thakur, and Tower will continue to be led by Russell Ellwanger during this time. Upon the close of the transaction, Intel’s intent is for the two organisations to become a fully integrated foundry business. The company will share more details on integration plans at that time.


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