Chip and semiconductor manufacturer Tower, first founded in 1993, went public in 1994 and its stocks jumped about 50% last Monday when Wall Street Journal first heard about the deal.
Tower Semiconductor focuses on speciality products such as radio frequency (RF) chips, CMOS image sensors, and power management parts.
Intel said that the ‘definitive agreement’ will significantly advance Intel’s integrated device manufacturing (IDM) 2.0 strategy as the company further expands its manufacturing capacity, global footprint and technology portfolio to address unprecedented industry demand.
Last year, Intel announced the IDM 2.0 to boost its manufacturing expansion, starting with a $20 billion plants in Ohio and New Mexico.
Intel also launched Intel Foundry Services (IFS) as part of the strategy, with the task of increasing chip production and becoming a major provider of US and European-based semiconductor manufacturing capacity to serve global customers.
“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,” said Pat Gelsinger, Intel CEO.
“This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated speciality technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors.”
Dr. Randhir Thakur, president of IFS, said: “We are thrilled to welcome the Tower team to Intel. Their decades of foundry experience, deep customer relationships and technology offerings will accelerate the growth of Intel Foundry Services. Tower and IFS together will provide a broad portfolio of foundry solutions at global scale to enable our customers’ ambitions.”
Last week, the EU announced a €43 billion plan to combat the chip shortage as it only has 10% of the global market share, similarly to the US which also has 10%.
The transaction is expected to close in approximately 12 months, Intel said.
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