- Intel Corp and Tower Semiconductor sign a deal for $5.4 billion.
- This deal gives Intel access to specialized products and takes advantage of the rising demand for semiconductors.
- The tower will remain independent until the deal closes and then will integrate into Intel Foundry Services (IFS).
It was recently confirmed that Intel Corp is buying Israeli chipmaker Tower Semiconductor for $5.4 billion. This will give the company access to specialized products and benefit from the rising demand for semiconductors.
Intel is paying $53 per share for Tower Semiconductor, which is above the closing price of $33.13 on the NASDAQ (~on 14th Feb). After the delayed opening, it was demonstrated that Tower’s Tel Aviv listed shares were 40% higher today.
Intel & Israeli Chipmaker deal benefits
With this acquisition, Intel Corp will have a strong foothold in the sector which is dominated by Taiwan-based TSMC—the world’s largest chipmaker. There is a global semiconductor shortage and with this deal, Intel is positioned to advantage from the production of chips for everything from smartphones to cars.
The Intel Chief Executive, Pat Gelsinger commented, “Tower’s specialty technology portfolio (and) geographic reach…will help scale Intel’s foundry services and advance our goal of becoming a major provider of foundry capacity globally.”
The deal will enable Intel to offer a compelling breadth of cutting-edge nodes and differentiated specialty technologies on mature nodes, thus unlocking new opportunities for existing and future customers.
Intel Corp’s large presence in Israel
Intel Corp already has a large presence in Israel with a legacy of nearly 50 years and is amongst Israel’s largest exporters. In 2017, Intel bought Mobileye—autonomous vehicle technology, for $15.3 billion. It has five sites in Israel with 14,000 employees.
Intel Corp and Tower Semiconductors deal is estimated to close in 12 months and has received unanimous approval from both boards. The deal is still subjected to a few regulatory approvals including the approval of Tower’s shareholders.
Tower will remain independent until the deal closes. And later will be integrated into Intel Foundry Services (IFS) that Intel established to help meet the growing global demand for semiconductor manufacturing capacity.