Intel acquires Israeli Tower for $ 5.4 billion

This is 42% higher than the value of Tower Semiconductor at the opening of trading today, which stood at $ 3.8 billion.

Pat Glasinger, Intel Global CEO: "The deal will enable Intel to provide a supply of unique and advanced technologies in an era of unprecedented demand for semiconductors"

Roast Greenberg

15/02/2022

Tuesday, 15 February 2022, 11:59 Updated: 12:06

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The chip field continues to heat up;

The American chip giant Intel is acquiring the Israeli analog chip company Tower Semiconductor for $ 5.4 billion - 42% above the value of the Israeli company, which stands at $ 3.8 billion as of the beginning of the trading day.

The companies announced today (Tuesday) that they have signed a binding memorandum of understanding under which Intel will acquire Tower at a price of $ 53 per share in cash, which recently reflects a value of $ 5.4 billion.

Intel notes that the acquisition promotes its IDM 2.0 strategy, and expands its production capacity, global footprint and technological offering, to meet "an unprecedented demand in the industry."

As a key part of its IDM 2.0 strategy, Intel established Intel Foundry Services (IFS) in March 2021 to meet the growing global demand for semiconductor manufacturing capability and become a major provider of chip manufacturing in the US and Europe.

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Did we see the deal of the year in Israel as early as mid-February? (Photo: Flash 90, Yonatan Sindel, craetive commons)

"Expect to be an integral part of Intel's offering"

Tower's expertise in unique analog technologies, such as radio frequencies (RF),

power management, silicon germanium (SiGe) and industrial sensors, along with extensive IP and electronic design (EDA) partnerships, and global manufacturing capability, will help Intel achieve its goals. .

Tower currently serves high-growth markets and has a geographically deployed production capacity with manufacturing facilities in the

US and Asia, serving FABLESS companies (without production capacity) and IDM companies (key developer and chip makers).

Of the Oppenheimer investment house, which announced at the time of the announcement of the deal that "Intel had no connection to the analog chip market, which is Tower's area of ​​expertise, but the acquisition of Tower makes much more business sense than a host of previous acquisitions made by Intel.

Tower owns 9 manufacturing plants, including 3 in Japan as part of a partnership with Panasonic, and has entered into a partnership with the European company STMicroelectronics (STM) to establish a new 300mm plant in Italy.

Intel will need to obtain many regulatory approvals in Israel, USA "In Japan, Taiwan and Europe, as well as in China, where it also signed an agreement to establish a plant with a local player, or to sell some of the Tower plants to a third party.

In any case, the acquisition of 9 manufacturing plants with an investment of $ 6 billion is a very attractive deal for Intel, since the cost of setting up a new manufacturing plant in the field of chips is estimated at billions of dollars. Pat

Glasinger

: "Tower's unique technology offering, its global manufacturing capability and strong customer relationships will help expand Intel's foundry services and advance our goal of becoming a major global chip manufacturing provider.

The deal will enable Intel to provide a wide range of unique and advanced technologies while opening up opportunities News for existing and future customers in an era of unprecedented demand for semiconductors. "

: “Tower has built a range of unique and advanced analog technologies and manufacturing solutions based on deep partnerships with customers, along with global manufacturing capabilities.

Together with Intel, we will drive new and significant growth opportunities and offer greater value to our customers through a complete package of technological solutions along with a very broad global footprint.

We look forward to being an integral part of Intel's foundry offering. "

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