Intel acquires chip maker Tower Semiconductor – update

Intel acquires Israeli chip maker Tower Semiconductor. The company does this for its Foundry Services, with which Intel will produce chips for other companies.

Intel makes the acquisition announced on Thursday. The acquisition is worth $5.4 billion. Intel gains access with the acquisition up to eight new chip factories. Tower has a ‘fab’ producing 150mm wafers, three 200mm factories and a 300mm fab. Those production locations are spread over three countries: Israel, the US and Italy. TPSCo, a 51 percent stake in Tower Semiconductor, has three more 200mm fabs and a 300mm factory in Japan.

The acquisition is part of Intel’s IDM 2.0 strategy. The company unveiled it a year ago. Intel wants to use this to produce chips for other manufacturers, as part of its Foundry Services. Intel writes that the acquisition of Tower accelerates its plans to become a “major provider of foundry services and capacity.” Separately, the company is also building several new factories in the US and has plans to expand in Europe.

Tower Semiconductor does not focus on advanced chip manufacturing. Instead, it makes automotive chips, image sensors, power management chips, and silicon photonics, among others on older processes. Tower competes with chip manufacturers such as UMC and GlobalFoundries, also writes Tom’s Hardware. Intel was rumored to have previously taken over the latter for $30 billion, but that deal fell through.

Update, 11:31 a.m.: Intel has confirmed the acquisition. The article has been adapted accordingly.