In an unexpected turn of events, Intel and Tower Semiconductor have decided to collaborate, despite Intel’s recent cancellation of its $5.4 billion acquisition of the latter. Intel has now announced that it will provide foundry services and 300mm manufacturing capacity to Tower.
Intel and Tower Semiconductor have entered into a foundry deal and investment agreement. Although Intel’s previous acquisition plan was canceled, the new collaboration allows Tower to utilize Intel’s manufacturing facilities, expanding its production capabilities.
New Foundry Services Deal
Under the terms of the agreement, Tower will utilize Intel’s New Mexico plant, operated by Intel Foundry Services (IFS). Tower intends to invest up to $300 million to acquire and own equipment and other fixed assets, which will be installed in the manufacturing facility. This partnership will give Tower access to a new capacity corridor, providing over 600,000 photo layers per month to meet the growing demand for 300mm chips.
New Manufacturing Capacities
As part of the deal, Intel will now be responsible for manufacturing Tower’s 65-nanometer power management BCD (bipolar-CMOS-DMOS) flows. Tower already owns its own manufacturing facilities in Israel, the U.S., Japan, and soon in Italy through a partnership with STMicroelectronics. This collaboration with Intel opens up new possibilities for Tower to expand its customer partnerships and focus on advanced power management and radio frequency silicon on insulator (RF SOI) solutions.
Intel Foundry Services, launched with the objective of delivering the world’s first open system foundry, seeks to bring together a secure, sustainable, and resilient supply chain. Stuart Pann, Intel SVP and GM of Intel Foundry Services, expressed excitement about Tower’s recognition of the unique value offered by Intel. Russell Ellwanger, Tower CEO, also emphasized their commitment to fulfilling customer demand roadmaps and further collaborating with Intel to develop synergistic solutions.
Driving U.S. Manufacturing and Innovation
This foundry deal between Intel and Tower aligns with the broader effort in the U.S. to bring back hardware manufacturing and innovation to the country. By leveraging Intel’s expertise and resources, the collaboration not only supports Tower’s growth but also contributes to the national goal of strengthening the semiconductor industry. This move comes after the cancellation of the Tower acquisition raised doubts about Intel’s modernization strategy. However, the latest announcement demonstrates that Intel remains committed to advancing its plans for foundry-style manufacturing services.