Intel acquires Tower Semiconductor for $ 5.4 billion

Intel announced the acquisition of Tower Semiconductoran Israeli chip company, worth 5.4 billion dollars. The processor giant thus enters the semiconductor contract manufacturing sector. Which will also produce in Italy, given that in November Tower inaugurates a production center in Agrate Brianza.

Intel acquires Tower Semiconductor for $ 5.4 billion

For years, Intel has played a prominent role in the world of computer processors. But the company is facing fierce competition. Arm it has a dominant role in the mobile market, and now it also produces chips for Apple (which is ditching Intel altogether to make the chips themselves). Samsung, NVIDIA and the historic rival AMD they are diversifying their offer.

One of the solutions that Intel has in mind to this problem is the birth of Intel Foundry Service, announced last year. In this way it can produce chips not only for its own processors, but also semiconductors for other companies that want to develop their own chips. For this he invested 20 billion dollars to build two factories in Arizona and announced the construction of the world’s largest chip foundry hub in Ohio.

But building foundries takes time, and Intel wants to get started right away (or almost). Indeed it announced the acquisition for 5.4 billion dollars of Tower Semiconductor (of which there were already signs in recent days). The transition will take place over the next 12 months. Intel bought the shares at $ 53 eachwith the aim of diversifying and expanding its production capacity.

Intel CEO, Pat Gelsinger, explained, “Tower’s technology portfolio, its geographic availability, deep customer relationships and services operations will help scale Intel’s foundry services. And they will advance our goal of becoming one of the largest semiconductor providers in the world. The agreement will allow Intel to offer an attractive portfolio of leading-edge nodes and specialized solutions on mature ones. Unlocking new possibilities for current and future customers in this era of unprecedented demand for semiconductors ”.

Manage the demand for semiconductors

Although we always associate Intel with yours Core or Xeo line processorsn, the company is trying to differentiate and also focus on services as a foundry. The company already has agreements with really important companies, such as Qualcomm e Amazon (which has a lot of data centers around the world).

To handle these demands, it is investing billions in new infrastructure. However, the acquisition of Tower gives the opportunity to offer immediately sensori CMOS and other chips to their customers. Even if the market volume is not comparable to that of other rivals in this area. As Formiche.net points out, the turnover di Tower is worth 1.3 billion dollars. TSMC’s (which among others supplies semiconductors for iPhone chips) is worth $ 56 billion.

But Tower (which until 2020 was called TowerJazz), supplies several companies’fabless‘, which then design chips but don’t have the factories to produce them (like Apple or Google recently). And it also has several manufacturing infrastructures, unlike Intel. In particular to an office a Migdal HaEmek where it has two implants. Two more plants in the United States and three in Japan, thanks to a partnership with Panasonic.

It is interesting for our country that in November 2022 Tower aims to open a plant ad Agrate Brianzain Lombardy, with a collaboration with the Italian-French group StMicroelectronics. They are expected well 2,000 seats of work, for an investment of about half a billion dollars. Intel is also discussing with the Italian government (along with other companies) to relaunch the microchip supply chain, as required by the PNRR. So this may just be the first Intel foundry in Italy.

Intel is investing in this new sector and Tower represents the first step in this change of strategy. Which could lead one day to settle the current ones supply chain problems involving chips, increasingly needed for many devices. Not just computers, an area in which Intel remains one of the main interlocutors.