Intel's Acquisition of Tower Semiconductor on Track for Completion by June 2023

In February 2022, Intel announced its plan to acquire Tower Semiconductor for a sum of US$5.4 billion, with the aim of enhancing its foundry business. While the acquisition was expected to be completed within 12 months, it has not yet been finalized even after 13 months. However, Intel officials remain confident that the acquisition will be completed by the end of June 2023.

Tower Semiconductor's Expertise

Tower Semiconductor specializes in a range of technologies such as radio frequency (RF), power, silicon germanium (SiGe), and industrial sensors. The company also has an extensive portfolio of intellectual property (IP) and electronic design automation (EDA) partnerships. Its foundry layout is well-developed, which will benefit Intel and Tower Semiconductor's global customers.

Cross-Regional Foundry Business

Tower Semiconductor operates a cross-regional foundry business, with facilities in the US and Asia. The company serves fabless companies and IDM companies, and has an initial wafer capacity of more than 2 million wafer starts. The company also has growth opportunities in Texas, Israel, Italy, and Japan.

Foundry First Approach

Tower Semiconductor offers a "foundry first" approach to its customers, providing an industry-leading customer support portal, IP storefront, and design services and capabilities.

Regulatory Approvals and Closing Conditions

Intel remains optimistic about the completion of the acquisition by the end of June 2023. However, the completion of the acquisition is subject to regulatory approvals and customary closing conditions. In a statement issued to Bloomberg by Intel Israel, it was stated that "We hope to be able to close the Tower transaction in the first quarter of 2023, although the transaction may be delayed until the first half of 2023."

Implications for Intel

The acquisition of Tower Semiconductor will provide Intel with a range of specialized technologies and an extensive portfolio of IP and EDA partnerships. The company's cross-regional foundry business will also enable Intel to expand its customer base and increase its initial wafer capacity. Additionally, Tower Semiconductor's "foundry first" approach will allow Intel to provide its customers with enhanced design services and capabilities.

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