US technology giant Intel has snapped up Israeli chipmaker Tower Semiconductor for $5.4bn today as it looks to deepen its presence in the sector amid soaring demand for semiconductors.
Intel has forked out $53 per share to buy Tower, which specialises in making analogue chips used in cars, medical sensors and power management – well above the firm’s closing price of $33.13 when it closed on the Nasdaq on Monday.
Intel boss Pat Gelsinger said today that Tower’s specialised portfolio and geographic reach will help Intel achieve its goal of “becoming a major provider of foundry capacity globally”.
“This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors,” he said in a statement.
Tower has been pumping investment into equipment at its manufacturing sites in Israel, Texas and Japan to boost capacity to create 200 and 300 millimetre chips.
The deal follows a commitment from Intel to invest up to $100bn in a facility in Ohio that could become the world’s largest chipmaker on completion.
The deal received the endorsement of President Biden as the US scrambles to reduce its reliance on Asian chip manufacturing hubs.
Shares in Tower surged 48 per cent on the Nasdaq after news of a possible takeover was reported.