Intel is expected to announce a grand acquisition soon which would give a boost to its slow production or foundry. The Wall Street Journal reported that it is set to acquire the Israeli chip company, Tower for a whopping $6 billion. The clinching deal is expected to be announced this week itself.
Pal Gelsinger, Intel’s CEO, announced Intel’s Foundry strategy in March 2021. He spoke of the first part of the approach to be that of a $20 billion investment to accelerate the two fabs in Arizona. Intel intends to use them to contribute in the production of its chips and those for its clients.
These clients fall under the foundry services planned. The Global factories falling under these services, third-party capacity being used and building of the services itself is the aim towards the semiconductor manufacturing.
He views the purchase of Tower as an appropriate fit for its ” 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.”
The market value of Tower Semiconductors is approximately $3.6 billion and is known to produce various kinds of chips for its clients. These clients include automakers, medical and industrial equipment manufacturers and others. According to their website, they make chips ranging in sizes from 6,8 and 12 inches in total of seven fabrication facilities. These facilities are located in Israel, Italy, the United States and Japan.
The chips manufactured, apparently do not need the latest technologies and hence, the process does not require to be cutting edge either. Tower’s only responsibility is listed as to only regularly and reliably produce these chips in large volumes.
The chief analyst of ‘SemiAnalysis, Dylan Patel considers intel’s acquisition of Tower Semiconductor a clever move. This is because it will fill in the gaps in their foundry offerings.
The foundry services of Intel were launched in early 2021 and was expected to run as an independent business unit. In 2022, Intel made the revelation that they are planning to build a grand semiconductor facility in Ohio. They are hoping that it emerges as the world’s largest silicon producing location.
Before planning to acquire Tower, Intel was rumoured to purchase a comparatively much larger chip manufacturing company and AMD spinoff, GlobalFoundries. The purchase was supposed to be of around $30 billion. However, the deal never came through and the AMD spinoff made the choice to go for an Initial Public Offering (IPO).
Intel’s Tweet on acquiring Tower:
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>Intel is accelerating its global, end-to-end foundry business by acquiring Tower Semiconductor for $5.4 Billion. <a href=”https://t.co/mbdlypi2LF”>https://t.co/mbdlypi2LF</a></p>— Intel News (@intelnews) <a href=”https://twitter.com/intelnews/status/1493513587028942848?ref_src=twsrc%5Etfw”>February 15, 2022</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
