Intel has announced its intention to acquire Tower Semiconductor, a chip firm specializing in semiconductors for emerging markets such as automotive and aerospace. The deal will be completed with Intel paying $53 per share for Tower, meaning the acquisition will be worth about $5.4 billion.
Intel said it expects the acquisition to be completed within twelve months, but that closing the deal will require approval from both regulators and Tower shareholders.
Intel acquires Tower Semiconductor
Early in 2021, Intel announced the company’s integrated device manufacturing (IDM) strategy, which it calls IDM 2.0. Following the announcement, the firm launched Intel Foundry Services (IFS), a separate arm dedicated to producing chips for third-party customers, to rival TSMC. The broad goal is to position Intel at the crux of chip design and manufacturing in an era of unprecedented demand.
To support IDM 2.0 goals, Intel recently made a series of investments designed to help grow chip manufacturing capacity and capabilities. For example, the company announced that it will spend $20 billion on a 1,000-acre chip manufacturing facility in the United States, which will house eight separate factories when completed.
Meanwhile, last week, Intel surprised analysts by announcing a $1 billion investment to support companies working on open-source RISC-V processors and other chip innovations. The company’s grand plan is to lay the foundations for modular products that take advantage of multiple instruction set architectures (ISAs), from its own x86 chip to Arm and RISC-V.
Intel says the Tower acquisition is another piece of the same puzzle, expanding the company’s manufacturing capabilities and IFS portfolio for high-growth markets such as automotive, medical and aerospace.
Intel CEO Pat Gelsinger said, “Tower’s portfolio of proprietary technologies, geographic reach, deep customer relationships, and service-first operations will help scale Intel’s fabrication services and advance our ambition to become a major chip provider globally. ” said.
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