Feb 15, 2022 - Economy

Intel to buy Israeli chipmaker for $5.4 billion

Illustration of an infinite, recursive tunnel of semiconductor chips.

Illustration: Shoshana Gordon/Axios

Intel on Tuesday said it has agreed to buy Israel's Tower Semiconductor for around $5.4 billion in cash, or $53 per share (60% premium to Monday's closing price).

Why it matters: America's largest chipmaker is seeking to significantly expand its specialty manufacturing capability, at a time of surging semiconductor demand.

  • It's also Intel's second major purchase of an Israeli tech company, having previously bought Mobileye for $15.3 billion.

Elsewhere: AMD said it completed its $35 billion all-stock acquisition of San Jose, Calif.-based chipmaker Xilinx.

The bottom line: "Tower has been investing in equipment at its manufacturing sites in Israel, Texas and Japan to boost capacity for 200 and 300 millimetre chips. The company serves 'fabless' companies — which design chips but outsource manufacturing, as well as integrated device manufacturers, and offers more than 2 million wafer starts per year of capacity," Reuters' Steven Scheer writers.

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