Intel to acquire Tower Semiconductor for $5.4 billion

The acquisition is said to significantly advance Intel’s IDM 2.0 strategy as the company is looking to expand its manufacturing capacity, footprint and technology portfolio to address industry demand. 

“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,” says Pat Gelsinger, Intel CEO in the press release.

One of the key part of the company's IDM 2.0 strategy is the Intel Foundry Services (IFS), with which the company is looking to become a major provider of US- and Europe-based foundry capacity

Tower serves high-growth markets such as mobile, automotive and power. The company also operates in regions that are geographically complementary to Intel, with a foundry presence in the U.S. and Asia. Tower will also bring with it more than 2 million wafer starts per year of capacity – including growth opportunities in Texas, Israel, Italy and Japan. 

“With a rich history, Tower has built an incredible range of specialty analog foundry solutions based upon deep customer partnerships, with worldwide manufacturing capabilities. I could not be prouder of the company and of our talented and dedicated employees,” says Russell Ellwanger, Tower CEO. “Together with Intel, we will drive new and meaningful growth opportunities and offer even greater value to our customers through a full suite of technology solutions and nodes and a greatly expanded global manufacturing footprint. We look forward to being an integral part of Intel’s foundry offering.” 

Intel will acquire Tower for USD 53 per share in cash, representing a total enterprise value of approximately USD 5.4 billion. The transaction is expected to close in approximately 12 months and has already been unanimously approved by Intel’s and Tower’s boards of directors. The deal is however still subject to certain regulatory approvals and customary closing conditions, including the approval of Tower’s stockholders.

IFS and Tower Semiconductor will run independently until deal closure. IFS will continue to be led by Dr. Randhir Thakur, president of Intel Foundry Services, and Tower will continue to be led by Ellwanger during this time. Once the transaction is completed, Intel’s intent is for the two organisations to become a fully integrated foundry business.

In December 2021, Tower Semiconductor placed ninth among the global top 10 foundries based on 3Q21 revenue, by analysts at TrendForce.