Intel is set to buy Israeli company Tower Semiconductor for about $6 billion (around Rs 45,275 crore), a source familiar with the matter has said, as the US company seeks to advance its strategy for manufacturing chips under contract for other companies.
A deal could be unveiled as early as this week, the person said Monday, declining to be named because the matter was private.
The potential purchase would bolster Intel’s presence in a space dominated by Taiwan-based TSMC, the world’s largest contract chipmaker. It also comes at a time when the global shortage of semiconductors has hampered production of everything from smartphones to cars.
Tower Semiconductor, whose U.S. shares jumped 53% in extended trade, specializes in analog chips used in the automotive, mobile, medical and aerospace industries. It had a market capitalization of $3.6 billion (around Rs 27,160 crore) as of Monday’s close.
Intel and Tower Semiconductor did not immediately respond to requests for comment.
The US chipmaker said last month that it would invest up to $100 billion (about Rs. 7,54,880 crore) to build potentially the world’s largest chipmaking complex in Ohio. The move aims to restore Intel’s dominance in chip manufacturing and reduce America’s reliance on Asian manufacturing hubs.
Intel was also looking to buy GlobalFoundries for around $30 billion (roughly Rs. 2,26,450 crore), according to a Wall Street Journal report in July, but the chipmaker went public a few months later.
Chip manufacturing is expensive and difficult, so most companies either design or produce. Intel opened its factories to rival semiconductor designers to spread the cost.
Intel shares rose 0.4% after the announcement of the deal with Tower Semiconductor, first reported by The Wall Street Journal.
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