After acquisition deal falls through, Intel to provide foundry services to Tower

Sharon Wrobel is a tech reporter for The Times of Israel.

Tower Semiconductor headquarters in Migdal Haemek, Israel, February 16, 2022. (AP/Ariel Schalit)
Tower Semiconductor headquarters in Migdal Haemek, Israel, February 16, 2022. (AP/Ariel Schalit)

Chip giant Intel announces that it will provide foundry services to Tower Semiconductor to help the Migdal Ha’emek-based firm serve its customers globally.

The deal comes less than a month after Intel backed out of a $5.4 billion deal to buy the Israeli chipmaker.

Under the terms of the agreement, Intel Foundry Services (IFS), a standalone business unit tasked with becoming a major provider of US- and European-based semiconductor manufacturing capacity, will offer foundry services and 300mm chip manufacturing capacity to Tower. Foundry services involve the production and testing of semiconductor wafers and chips.

As part of the partnership deal, Tower will use Intel’s manufacturing plant in New Mexico and invest up to $300 million to purchase and own equipment and other fixed assets that will be installed at the facility, the two companies announce in a statement.

Commenting on the partnership, Tower CEO Russell Ellwanger says he is “excited to continue working with Intel.”

“We see this as a first step towards multiple unique synergistic solutions with Intel,” Ellwanger remarks.

The acquisition deal between the two companies fell through last month after Intel failed to secure a go-ahead from Chinese regulators for the purchase as demanded by the contract.

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