Intel to Buy Israel's Tower Semiconductor for $5.4B to Bolster Foundry Business
Intel is bolstering its fledgling foundry business by acquiring Tower Semiconductor, a manufacturer of speciality "analog chips" used for power management systems and CMOS image sensors, among other things.
Intel will pay $5.4 billion to buy the Israeli company, which produces semiconductors on mature manufacturing nodes from 45 nanometer up to over 250 nanometers.
The goal: Help Intel fill out its foundry business portfolio. Eleven months ago, Intel announced it was going to start making processors for third-party tech companies and Western governments, putting it in direct competition with semiconductor manufacturers such as TSMC and Samsung.
Intel’s foundry business is already offering to build CPUs on the x86, Arm, and RISC-V architectures. But with the Tower Semiconductor acquisition, the company can expand into chip manufacturing for radio frequency units, industrial sensors, car battery systems, and other specialty fields.
Tower Semiconductor employs about 5,500 workers across the globe, and serves several high-growth markets including mobile computing and the automotive industry, according to Intel.
“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.
In an investor call, Gelsinger also said the deal can help Intel meet the growing demand for semiconductors amid the ongoing chip shortage. Tower Semiconductor's products currently address about 30% of the semiconductor market.
Tower Semiconductor "simply don’t have the scale to meet the market demand," Gelsinger said. "And for us, we saw
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