Intel plans to acquire the Israeli chip manufacturing business Tower Semiconductor for $5.4 billion in cash, the company said Tuesday.
If the deal closes, it would boost Intel’s manufacturing capacity for older, less advanced chips. Intel has historically focused on the most advanced processors, or leading edge chips, and sold off older equipment to other companies. Intel said it expects the acquisition to close within 12 months.
Last year, under newly appointed CEO Pat Gelsinger, Intel said that it was creating a contract manufacturing unit to make chips designed by other companies, such as Qualcomm. Adding Tower Semi’s group of factories to Intel’s existing infrastructure would likely expand the company’s range of manufacturing offerings to include some of the less advanced chips used in autos, defense, and medical devices.
Last year, Intel explored acquiring GlobalFoundries, but the Abu Dhabi investment fund that owns it opted to take the company public instead.
Update, Feb. 15, 2022: This story was updated to reflect Intel's confirmation of talks with Tower Semiconductor.