Intel is close to buying Israeli firm Tower Semiconductor for about US$6-billion, a source familiar with the matter said, as the US company looks to advance its strategy of contract manufacturing chips for other businesses.
A deal could be unveiled as soon as this week, the person said on Monday, declining to be named as the matter was private.
The potential purchase would deepen Intel’s presence in a space dominated by Taiwan’s TSMC, the world’s largest contract chip maker. It also comes at time when the global semiconductor shortage has hampered the production of everything from smartphones to cars.
Tower Semiconductor, whose US shares surged 53% in extended trading, specialises in analogue chips used in the automotive, mobile, medical and aerospace industries. It had a market capitalisation of $3.6-billion as of Monday’s close.
Both Intel and Tower Semiconductor did not immediately respond to requests for comment.
Tower Semiconductor specialises in analogue chips used in the automotive, mobile, medical and aerospace industries
The US chip maker said last month it would invest up to $100-billion to build potentially the world’s largest chip-making complex in Ohio. The move is aimed at restoring Intel’s dominance in chip making and reducing America’s reliance on Asian manufacturing hubs.
Intel was also looking to buy GlobalFoundries for about $30-billion, according to a Wall Street Journal report in July, but the chip maker went public a few months later.
Chip-making is expensive and difficult, so most companies either design or produce. Intel has opened up its factories to rival semiconductor designers to spread costs. — Eva Mathews, (c) 2022 Reuters