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Intel is trying to buy chip manufacturer Tower Semi for $6 billion

An acquisition of Tower Semiconductor would expand Intel's manufacturing capacity for less advanced chips.

Patrick (Pat) Gelsinger is chief executive officer of Intel Corporation

Adding Tower Semiconductor's factories would give Intel the capacity to produce older chips needed for autos, among other things.

Intel

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.

Max A. Cherney

Max A. Cherney is a senior reporter at Protocol covering the semiconductor industry. He has worked for Barron's magazine as a Technology Reporter, and its sister site MarketWatch. He is based in San Francisco.

intelacquisitionstower semiconductorsemiconductors
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