Intel purchasing Israeli Tower for $5.4 billion 

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Intel Corporation (NASDAQ: INTC) purchases a chipmaker tower based in Israel for $5.4 billion. This purchase will give Intel Corp access to more innovative and specialized production processes. In addition, it will help put it in a better position to take full advantage of the ever-increasing demand for semiconductors.

Intel Corp is parting with $53 per share for the Israeli chipmaker Tower, which focuses on developing analogue chips in power management, medical sensors and cars. This consideration was well over the Monday $33.13 closing price.

Pros of the deal

This purchase will strengthen Intel Corp’s presence in a space Taiwan’s TSMC, the largest semiconductor manufacturer worldwide, dominates when the global chip shortage has negatively impacted the production of things like smartphones to automobiles.

Tower has been buying equipment and stocking them in its manufacturing facilities in Japan, Texas, and, of course, Israel to increase capacity for 200mm and 300mm chips. Intel serves “fabless” corporations, which outsource manufacturing but design the chips, and integrated device makers. The company also offers more than two million wafer starts every year of capacity.

Intel Corp’s Chief Executive Officer, Pet Gelsinger, said:

Tower’s specialty technology portfolio (and) geographic reach … will help scale Intel’s foundry services and advance our goal of becoming a major provider of foundry capacity globally.

Mr. Gelsinger continued:

This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors.

Business operations 

The company said it would part with $100 billion to build what it hopes will be one of the biggest chip-manufacturing facilities in the world. Intel plans to build this complex in Ohio. This move is meant to restore the company’s dominance in chip manufacturing and decrease the United States’ reliance on manufacturing hubs based in Asia.

Intel Corp has had a huge footprint in the Israeli market for over five decades now, and it’s one of the country’s biggest exporters. For example, it bought Mobileye, Israel’s autonomous vehicle tech for about $15.3 billion in 2017. The company employs around 14,000 people in Israel and has about five locations in the country.

The post Intel purchasing Israeli Tower for $5.4 billion  appeared first on Invezz.

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