Intel drops Tower acquisition

Business news | August 16, 2023

By Peter Clarke

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Leading US chipmaker Intel Corp. has cancelled its plan to acquire speciality foundry Tower Semiconductor Ltd. (Migdal Haemek, Israel) citing failure to get regulatory approval as the reason.

Intel will pay a termination fee of US$353 million to Tower.

The deal was first announced in February 2022 and Intel is thought to have been lobbying the Chinese anti-trust regulator specifically (see Intel’s CEO makes trip to see Chinese regulator over Tower).

The acquisition of Tower was key part of Intel’s plan to revitalize its chip manufacturing capabilities with the creation of Intel Foundry Services. Intel offers foundry services but the acquisition of Tower would have provided critical mass.

“Our foundry efforts are critical to unlocking the full potential of IDM 2.0, and we continue to drive forward on all facets of our strategy,” said Pat Gelsinger, CEO of Intel, in a statement. “We are executing well on our roadmap to regain transistor performance and power performance leadership by 2025, building momentum with customers and the broader ecosystem and investing to deliver the geographically diverse and resilient manufacturing footprint the world needs. Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future.”

Stuart Pann, senior vice president and general manager of Intel Foundry Services (IFS), said, “Since its launch in 2021, Intel Foundry Services has gained traction with customers and partners, and we have made significant advancements toward our goal of becoming the second-largest global external foundry by the end of the decade. We are building a differentiated customer value proposition as the world’s first open system foundry, with the technology portfolio and manufacturing expertise that includes packaging, chiplet standards and software, going beyond traditional wafer manufacturing.”

Intel is developing intellectual property for its nominal 3nm and 18 angstrom manufacturing processes and has signed deals with Arm and Synopsys.

Intel has also been awarded contracts by the US Department of Defense under the Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program, with five RAMP-C customers in design engagement on Intel 18A.