Intel's Tower Foundry Surprise: A Game-Changing Move After Acquisition Setback

Intel Expands Foundry Services with Tower Semiconductor Partnership

In a move following the failed acquisition attempt, Intel has announced a new partnership with Tower Semiconductor to offer foundry services. The deal comes after Intel's bid to acquire the Israeli chipmaker was canceled last month due to lack of approval from Chinese antitrust regulators.

Under the new agreement, Intel will provide Tower with 300mm chip manufacturing capacity at its advanced manufacturing facility in Rio Rancho, New Mexico. This setup will enable Tower to produce over 600,000 photo layers per month, supporting the demand for next generation 300mm chips.

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Tower Semiconductor CEO, Russell Ellwanger, expressed his excitement about the collaboration, stating that it allows them to cater to their customers' demand roadmaps, specifically focusing on advanced power management and radio frequency silicon on insulator technology.

Intel's intention to acquire Tower Semiconductor for £5.4bn was initially announced in February last year as part of the IDM 2.0 strategy. This strategy aims to combine Intel's existing internal factory network with third-party capacity and new Intel foundry services to tackle increasing competition in the market.

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Unfortunately, the acquisition had to be terminated due to a lack of approval from Chinese antitrust regulators. The deadline for approval was midnight, 15 August, which coincided with escalating trade tensions between the US and China.

Although the failed acquisition was a setback, Intel is continuing to make significant investments in chip factories worldwide. In Israel, the company plans to invest £25bn to build a new chip factory, marking the largest-ever international investment in the country. Additionally, a new £4.6bn chip plant will be established in Poland to meet the growing European demand.

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Essential points

Intel's collaboration with Tower Semiconductor is a strategic move to expand its foundry services after the failed acquisition attempt. This new partnership will allow Tower to meet the increasing demand for 300mm chips with advanced manufacturing capabilities provided by Intel. With its ongoing investments in chip factories worldwide, Intel remains committed to innovation and growth in the semiconductor industry.

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