Intel to acquire Tower Semiconductor for US$5.4m

Intel and Tower Semiconductor have announced a definitive agreement under which Intel will acquire Tower for US$53 per share in cash, representing a total enterprise value of approximately US$5.4 billion. The acquisition should significantly advance Intel’s IDM 2.0 strategy as the company further expands its manufacturing capacity, global footprint and technology portfolio to address industry demand.

As a key 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. IFS offers leading-edge process and packaging technology, committed capacity in the US and Europe and other geographies in the future, and a broad intellectual property (IP) portfolio.

Tower’s expertise in 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. Serving high-growth markets such as mobile, automotive and power, Tower operates a geographically complementary foundry presence with facilities in the US and Asia serving fabless companies as well as IDMs. It offers more than 2 million wafer starts per year of capacity. Tower also brings a foundry-first customer approach with a customer support portal and IP storefront, as well as design services and capabilities.

“With a rich history, Tower has built an incredible range of specialty analog 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,” said Tower CEO Russell Ellwanger. “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.”

Tower’s technology and manufacturing footprint is highly complementary to Intel’s IFS capabilities in leading-edge processes, allowing the combined company to provide broader offerings to customers at scale. With the addition of Tower, Intel should be strongly positioned to bring more value to customers across the nearly US$100 billion addressable foundry market.

“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,” said Intel CEO Pat Gelsinger. “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.”

The transaction is expected to close in approximately 12 months, at which point Intel plans for the two organisations to become a fully integrated foundry business. The deal has been unanimously approved by Intel and Tower’s boards of directors and is subject to certain regulatory approvals and customary closing conditions, including the approval of Tower’s stockholders.

“We are thrilled to welcome the Tower team to Intel,” said Dr Randhir Thakur, President of Intel Foundry Services. “Their 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.”

Image credit: ©stock.adobe.com/au/alphaspirit

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