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Intel Considering $6B Tower Semiconductor Acquisition: Reports
Joseph F. Kovar
The deal, assuming talks between the two companies don’t fall through, would help bolster Intel’s plan to be a leader in semiconductor manufacturing and strengthen its competitiveness against Taiwan-based TSMC, currently the world’s largest third-party chip manufacturer.
Intel is looking to acquire Israel-based Tower Semiconductor in a deal that could be valued at about $6 billion, according to The Wall Street Journal and Reuters.
The deal could be unveiled as early as this week, although talks between the two companies could also end without a deal, The Wall Street Journal, citing unnamed sources, reported Monday.
Such a deal would increase the competitiveness of Intel, which has recently invested heavily in building its own semiconductor manufacturing capabilities in the U.S., in a market currently dominated by Taiwan-based TSMC, which is the world’s largest contract chip manufacturer, Reuters reported Monday.
Tower Semiconductor, a publicly listed company with a market capitalization of about $3.6 billion, manufactures advanced analog integrated circuits.
The company specializes in customized analog solutions across a wide range of technologies including radio frequency, high performance analog, integrated power management, CMOS image sensors, non-imaging sensor, and MEMS (micro-electro-mechanical systems.
Tower Semiconductor operates seven manufacturing facilities, including two in Migdal Haemek, Israel; one each in Newport Beach, Calif. and San Antonio, Texas; and three in Japan in partnership with Panasonic Semiconductor Solutions.
Neither Intel nor Tower Semiconductor responded to CRN requests for further details.
Word of the possible acquisition of Tower Semiconductor comes at a time when Intel, under new CEO Pat Gelsinger, is moving rapidly to build a world-class semiconductor manufacturing capability rather than rely on third-party fabs for manufacturing.
Investment in semiconductor manufacturing is very, very expensive, and Intel is planning huge investments in U.S.-based semiconductor manufacturing. The company in January unveiled plans to invest over $20 billion to construct two new leading-edge chip factories in Ohio, in addition to $20 billion it plans to invest in two new fabs in Arizona.
Intel on Dec. 29 also unveiled a two-phase plan to sell its SSD business and certain NAND SSD-associated intellectual properties, as well as its Dalian, China-based NAND memory manufacturing facility, to South Korea-based semiconductor manufacturer SK Hynix, in a deal worth $7 billion. That includes the creation of a new company, Solidigm, owned by SK Hynix. The Korean company is also slated to pay Intel an additional $2 billion after it acquires Intel’s remaining NAND business assets in 2025.
The news about the potential deal, which broke after the close of the U.S. stock market, caused Tower Semiconductor’s stock price to soar by nearly 50 percent in after-hours trading. The company is listed on the Nasdaq stock exchange with the ticker symbol TSEM.