Intel to buy Israeli chipmaker for $5.4 billion

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.