Enterprise IT

Intel to buy Tower Semiconductor for $5.4 billion in foundries drive

Intel has agreed to buy Israeli analog semiconductor foundry specialist Tower Semiconductor for $5.4 billion as it ramps up its efforts to build a global foundry business — offering chip production for outside customers.  

Intel launched its Intel Foundry Services (IFS) in March 2021 to help meet demand for semiconductor foundry capacity. Intel said that when the $53 per share cash deal closes (subject to regulatory approval, in approximately 12 months) its intent is for the two organisations to “become a fully integrated foundry business”.

Tower Semiconductor has seven foundries globally including in Israel, Japan, the US and Italy.

The move comes a week after Intel announced that it would also open up its fabs for open source RISC-V semiconductor production is a landmark move. Intel has grown fat on production of its closed-source, complex instruction set computer (CISC) x86 processors. RISC-V is an open source reduced instruction set computer (RISC) CPU architecture group with a base set of 47 instructions that offers developers flexibility, customisation and the ability to collaborate with others around the world on designing and optimising semiconductors.)

(That deal was welcomed by companies ranging from SiFive to Ventana Micro Systems which said its RISC-V cores would be made available on IFS’ manufacturing processes, as the RISC-V open standards hardware organisation said the decision signalled “the recognition that massive investment in open source has the power to change the course of history” as Calista Redmond, CEO, RISC-V International put it. She added: “Open collaboration in RISC-V has already ignited a profound shift in the semiconductor industry, and this partnership will accelerate innovation in open computing. RISC-V welcomes Intel and looks forward to our collective expansion and the commercial adoption of RISC-V across compute workloads and industries, growing RISC-V everywhere.”)

What does Tower Semiconductor do?

Tower Semiconductor provides technology and manufacturing platforms for integrated circuits (ICs) across the aerospace, automotive, consumer, defence, industrial, infrastructure, medical and mobile sectors. It has two foundries in Israel (150mm and 200mm), two in the U.S. (200mm), three facilities in Japan (two 200mm and one 300mm) which it owns through its 51% holdings in TPSCo and is sharing a 300mm manufacturing facility being established in Italy with ST Microelectronics. It offers two million wafer “starts” per year of capacity. 

The company, which has some 5,500 staff globally, is a Trusted Supplier to the United States Department of Defense’s (DoD’s) Defense Microelectronics Activity (DMEA), offering national security critical microelectronic components. Its portfolio spans an alphabet soup of semiconductor-related technologies including SiGe, BiCMOS, Mixed-Signal/CMOS, CMOS image sensor, integrated power management (including for motor drivers, battery management load switches, voltage regulators), and microelectromechanical systems (MEMS). 

“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.”

The company added in a January 15 press release that “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” with the deal set to create a “globally diverse end-to-end foundry”.

More to follow.

See also: EU Chips Act disappoints, with doubts over €43b funding

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