Intel mentioned it's shopping for Israeli firm Tower Semiconductor for $5.4 billion in a deal that would give the California chipmaking big an edge within the enterprise of constructing custom-designed chips.
Intel CEO Pat Gelsinger mentioned Tuesday that buying Tower will assist broaden Intel’s newly fashioned “foundry” enterprise that makes microprocessors for different companies.
Intel will “profit from a long time of expertise that Tower brings in how one can run a world foundry,” Gelsinger mentioned on an investor name concerning the deal.
Tower, primarily based in Migdal Haemek, Israel, focuses on making analog chips utilized in automobiles, cellular units and in industrial, medical and army sectors.
The businesses mentioned it might take a 12 months for the deal to shut. It’s been accredited by every firm’s board of administrators however will face scrutiny from authorities regulators and have to be accredited by Tower’s shareholders.
Amid rising demand for semiconductors and an ongoing world chip scarcity, Santa Clara-based Intel mentioned the deal additionally will assist broaden its manufacturing capability and world footprint.
Many chipmakers have been searching for to diversify their provide chains to forestall the disruptions attributable to pandemic lockdowns and different sudden occasions, particularly in Asia, which dominates world chip manufacturing.
Tower has factories in Newport Seaside, San Antonio, Texas, Japan and Israel. It additionally shares an Italian manufacturing unit with one other firm. Tower began in 1993 with the acquisition of an Israeli chip manufacturing unit constructed by former U.S. chipmaker Nationwide Semiconductor.
Tower’s facility on Jamboree Street is concentrated on chips constructed for the U.S. aerospace and protection industries and will complement Intel’s personal settlement with the Pentagon final 12 months to construct chips for army methods, Gelsinger mentioned.