Intel buys Tower Semiconductor for $5.4 billion to diversify foundry business

(credit: Andrew Cunningham)

Intel has agreed to pay $5.4 billion to buy Tower Semiconductor, an Israeli foundry that focuses on specialty processes to make chips for imaging, power management, and wireless communications.

The acquisition is Intel's latest move to add capacity and customers to its new foundry division, which focuses on making chips for other companies. CEO Pat Gelsinger is betting that by expanding capacity and making more semiconductors-not just its own-his company can claw its way get back to the leading edge. Today, just two firms, TSMC and Samsung, make the world's most advanced chips.

Tower's specialty technology portfolio, geographic reach, deep customer relationships and services-first operations will help scale Intel's foundry services and advance our goal of becoming a major provider of foundry capacity globally," Gelsinger said in a statement.

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