Intel to acquire Tower Semiconductor for $5.4 billion to bolster its foundry business

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In an effort to diversify its end-to-end foundry business, Intel has announced that it will acquire Israel-based semiconductor manufacturing company Tower Semiconductor for $4.5 billion in cash. Intel says the acquisition will help "meet growing semiconductor demand and brings more value to customers across the nearly $100 billion addressable foundry market."

Tower Semiconductor specializes in manufacturing analog integrated circuits used in the automotive, mobile, medical, and aerospace industries. The company currently has five fabrication facilities spread across Israel and the USA. Intel says the acquisition of Tower is a key part of its IDM 2.0 strategy, which aims to expand the company's manufacturing capacity, global footprint, and technology portfolio.

Commenting on the acquisition, Intel CEO Pat Gelsinger said:

“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.”

Reacting to Intel's acquisition, the CEO of Tower Semiconductor Russell Ellwanger said:

“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 soon host a conference call for investors, media, and industry analysts to provide further details on the acquisition.

Back in July last year, Intel tried to buy GlobalFoundries for $30 billion, according to a report published by Wall Street Journal. However, the deal didn't materialize as the chipmaker later went public. Earlier this month, the company announced it would create a new $1 billion fund to boost innovation in the foundry ecosystem.

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