Intel has signed a deal worth approximately $5.4 billion to acquire Israeli semiconductor company Tower Semiconductor in a move to creates a globally diverse end-to-end foundry to help address the growing demand for semiconductors.

Tower Semiconductor, which is dual-listed on the Nasdaq and the Tel Aviv Stock Exchange, is a foundry for analog semiconductor solutions. Its shareholders are being offered $53 per share in cash by Intel.

Intel acquisition of Tower Semiconductor is part of the former’s IDM 2.0 strategy under which it aims to further ramp up its chips manufacturing capacity, global footprint, and technology portfolio.

Upon closing of the deal, Tower Semiconductor will be absorbed into Intel Foundry Services, a foundry business created by Intel in 2021.

Commenting on Intel acquisition of Tower Semiconductor, Pat Gelsinger — Intel CEO said: “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.

“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 Semiconductor specializes in tailored analog solutions for manufacturing differentiated semiconductors. The Israeli firm has process technologies like radio frequency (RF), high performance analog (HPA), integrated power management, CMOS image sensors, mixed-signal CMOS non-imaging sensors, and micro-electro-mechanical systems (MEMS).

It has seven semiconductor fabs — two each in Israel and the US, and three fabs in Japan through a joint venture with Panasonic Semiconductor Solutions.

Russell Ellwanger — Tower Semiconductor CEO, commenting on Intel acquisition of Tower Semiconductor, said: “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.

“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 acquisition of Tower Semiconductor will be subject to approval by the latter’s stockholders, receipt of regulatory approvals, and other conditions, upon which, it is likely to be wrapped up in approximately 12 months.

Recently, Intel announced an investment of more than $20 billion to build two new semiconductor factories in Licking County, Ohio.

  CMOS image sensors, Intel, Intel Foundry Services, Israel, Pat Gelsinger, Russell Ellwanger, semiconductors, Tower Semiconductor, USA