Tuesday, October 3, 2023
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Intel and Tower ink major foundry deal, $300M investment after Intel cancels its $5.4B Tower acquisition

Two weeks after Intel stated it will cancel its plan to accumulate Tower Semiconductor for $5.4 billion amidst pushback from regulators, the 2 corporations intend to work collectively anyway.

Intel at present stated that it will present foundry providers and 300mm manufacturing capability to Tower. As a part of the deal, Tower would use Intel’s plant in New Mexico, operated by Intel Foundry Companies (IFS), investing as much as $300 million to “purchase and personal gear and different fastened property” that will be put in within the manufacturing facility.

The deal will give Tower a brand new capability hall, it stated, of “over 600,000 photograph layers per 30 days” to fulfill anticipated demand for 300mm chips. The deal will imply that Intel can be manufacturing Tower’s 65-nanometer energy administration BCD (bipolar-CMOS-DMOS) flows. Tower itself additionally owns its personal manufacturing amenities in owns manufacturing amenities in Israel (150mm and 200mm), the U.S. (200mm), Japan (200mm and 300mm) and shortly in Italy in partnership with STMicroelectronics.

“We launched Intel Foundry Companies with a long-term view of delivering the world’s first open system foundry that brings collectively a safe, sustainable, and resilient provide chain with the very best of Intel and our ecosystem. We’re thrilled that Tower sees the distinctive worth we offer and selected us to open their 300mm U.S. capability hall,” stated Stuart Pann, Intel SVP and GM of Intel Foundry Companies, in a press release.

“We’re excited to proceed working with Intel,” added Tower CEO Russell Ellwanger. “As we glance to the long run, our main focus is to increase our buyer partnerships via high-scale manufacturing of modern know-how options. This collaboration with Intel permits us to satisfy our clients’ demand roadmaps, with a specific concentrate on superior energy administration and radio frequency silicon on insulator (RF SOI) options, with full course of movement qualification deliberate in 2024. We see this as a primary step in the direction of a number of distinctive synergistic options with Intel.”

Semiconductors and the manufacturing of next-generation chips within the U.S. have been a key part of a wider effort within the U.S. to deliver extra {hardware} manufacturing and innovation again to U.S. corporations and the U.S. financial system after years of outsourcing operations and dealing with worldwide companies in nations like China, a technique that’s been codified within the CHIPS and Science Act handed final yr.

Intel, as one of many world’s greatest semiconductor corporations, has been a cornerstone of that effort. So when the corporate’s deal to accumulate Tower fell aside — after regulators in China, the place Intel has vital enterprise, pushed again and declined to approve the acquisition, presumably as its personal effort to counterbalance the results of U.S. insurance policies in opposition to Chinese language corporations — many requested whether or not the cancelled deal would pose a setback for Intel’s modernisation technique.

The message with at present’s information appears to be that Intel (and Tower) have discovered one other solution to deal with the chance to construct chips — one that may not consolidate returns as nicely for Intel however nonetheless represents progress.




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