Tower and Intel reach chip production agreement

Tower Semiconductor fab  credit: Shlomi Yosef
Tower Semiconductor fab credit: Shlomi Yosef

After the cancelation of Intel's acquisition of Tower Semiconductor, the two companies have now agreed to cooperate on chip production in New Mexico.

Israeli chipmaker Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE:TSEM) and Intel unit Intel Foundry Services (IFS) today announced an agreement in which Intel will provide foundry services and 300mm manufacturing capacity to help Tower serve its customers globally.

Last month, Intel canceled its $5.4 billion acquisition of Migdal Ha'Emek-based Tower, after failing to gain the necessary regulation approvals in China. Under the terms of that deal, Intel was required to pay Tower $353 million compensation.

Under the new agreement, Tower will utilize Intel’s advanced manufacturing facility in New Mexico. Tower will invest up to $300 million to acquire and own equipment and other fixed assets to be installed in the New Mexico facility, providing a new capacity corridor of over 600,000 photo layers per month for Tower’s future growth, enabling capacity to support forecasted customer demand for 300mm advanced analog processing.

This agreement demonstrates the commitment from both Intel and Tower to expand their respective foundry footprints with solutions and scaled capabilities. Intel will manufacture Tower’s highly differentiated 65-nanometer power management BCD (bipolar-CMOS-DMOS) flows, among other flows at Intel’s Fab 11X in Rio Rancho, New Mexico.

Intel SVP and general manager of Intel Foundry Services Stuart Pann said, "We launched Intel Foundry Services with a long-term view of delivering the world’s first open system foundry that brings together a secure, sustainable, and resilient supply chain with the best of Intel and our ecosystem. We’re thrilled that Tower sees the unique value we provide and chose us to open their 300mm U.S. capacity corridor."

Tower CEO Russell Ellwanger added, "We are excited to continue working with Intel. As we look to the future, our primary focus is to expand our customer partnerships through high-scale manufacturing of leading-edge technology solutions. This collaboration with Intel allows us to fulfill our customers’ demand roadmaps, with a particular focus on advanced power management and radio frequency silicon on insulator (RF SOI) solutions, with full process flow qualification planned in 2024. We see this as a first step towards multiple unique synergistic solutions with Intel."

Published by Globes, Israel business news - - on September 5, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Tower Semiconductor fab  credit: Shlomi Yosef
Tower Semiconductor fab credit: Shlomi Yosef
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