Intel has announced its intention to acquire Tower Semiconductor, a chip foundry that specializes in analog semiconductors for emerging markets such as automotive and aerospace.
The cash-only deal will see Intel pay $53 per share for Tower, which equates to a total value of roughly $5.4 billion.
Intel says it expects the acquisition to close within twelve months, but the deal will still need to receive the green light from both regulators and Tower stockholders.
Intel’s IDM 2.0 strategy
In early 2021, Intel made public a reworking of its integrated device manufacturing (IDM) strategy, which the company called IDM 2.0. The broad objective is to position Intel at the bleeding edge of chip design and manufacturing, during a period of unprecedented demand.
Off the back of the announcement, the firm launched Intel Foundry Services (IFS), a distinct arm dedicated to manufacturing chips for third-party customers, in the same way as pure-play foundry TSMC.
In support of its IDM 2.0 aspirations, Intel has recently made a series of investments designed to help scale up its chip manufacturing capacity and capabilities.
For example, the company announced it will spend $20 billion on a state-of-the-art 1,000-acre chip manufacturing facility in Ohio, USA, which will house as many as eight separate fabs once complete.
Last week, meanwhile, Intel surprised commentators by revealing a $1 billion investment in support of companies working on open source RISC-V processors and other chip innovations. The idea is to lay the foundations for modular products that make use of multiple instruction set architectures (ISAs), from Intel’s own x86 to Arm and RISC-V.
Intel says the Tower acquisition is another piece of the same puzzle, expanding the company’s manufacturing capacity and broadening the IFS portfolio with process technologies for specialist but high-growth markets such as automotive, medical and aerospace.
“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.”
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