Intel To Buy Israeli Firm Tower Semiconductor In $5.4B Deal

Intel Corporation is buying another Israeli company in its sixth acquisition to date. The US chip giant will acquire Israeli chipmaker Tower Semiconductor, the companies said on Tuesday.

Intel said the companies entered a definitive agreement under which Intel will acquire Tower for $53 per share in cash, representing a total enterprise value of about $5.4 billion.

The acquisition significantly advances Intel’s integrated device manufacturing (IDM) 2.0 strategy as the company expands its capacity to manufacture, global footprint, and technology portfolio “to address unprecedented industry demand,” a statement from the company said.

Founded in 1993, Tower Semiconductor offers analog semiconductor foundry solutions and provides technology and manufacturing platforms or integrated circuits in markets like mobile, infrastructure, automotive, medical, industrial, aerospace, and defense.

“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 Pat Gelsinger, Intel CEO. “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.”

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, the companies said.

Tower operates a geographically complementary foundry presence with facilities in the US and Asia serving fabless companies as well as IDMs and offers more than t million wafer starts per year of capacity – including growth opportunities in Texas, Israel, Italy and Japan. Tower also brings a foundry-first customer approach with an industry-leading customer support portal and IP storefront, as well as design services and capabilities. 

Tower Semiconductor, formerly known as TowerJazz, collaborated with SRI International, an independent nonprofit research center, on a high-performance CMOS imager for the US Naval Research Laboratory (NLR). That imager later became part of NASA’s Parker Solar Probe mission heading closer to the sun than any other manmade object. The Parker Solar Probe was launched from Cape Canaveral Air Force Station, Florida to better understand how the sun affects our solar system, in August 2018.

The transaction is expected to close in approximately 12 months