San Francisco– Chip-maker Intel on Tuesday confirmed it is acquiring Israeli contract chip manufacturer Tower Semiconductor for approximately $5.4 billion.

The acquisition advances Intel’s IDM 2.0 strategy as the company further expands its manufacturing capacity, global footprint and technology portfolio to address unprecedented industry demand, the company said in a statement.

“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,” said Pat Gelsinger, Intel CEO.

As a key part of its IDM 2.0 strategy, Intel established Intel Foundry Services (IFS) in March 2021 to help meet the growing global demand for semiconductor manufacturing capacity and to become a major provider of US- and Europe-based foundry capacity to serve customers globally.

Tower’s expertise in specialty technologies, such as radio frequency (RF), power, silicon-germanium (SiGe) and industrial sensors, extensive IP and electronic design automation (EDA) partnerships, and established foundry footprint will provide broad coverage to both Intel and Tower’s customers globally.

Tower serves high-growth markets such as mobile, automotive and power, and operates a geographically complementary foundry presence with facilities in the US and Asia serving fabless companies as well as IDMs and offers more than 2 million wafer starts per year of capacity – including growth opportunities in Texas, Israel, Italy and Japan.

“Together with Intel, we will drive new and meaningful growth opportunities and offer even greater value to our customers through a full suite of technology solutions and nodes and a greatly expanded global manufacturing footprint,” said Russell Ellwanger, Tower CEO.

With the addition of Tower, Intel said it is positioned to bring more value to customers across the nearly $100 billion addressable foundry market.

“We are building Intel Foundry Services to be a customer-first technology innovator with the broadest range of IP, services and capacity,” said Dr Randhir Thakur, president of Intel Foundry Services. (IANS)