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Intel to Purchase Tower Semiconductor for $5.4 Billion


Acquisition accelerates Intel’s world, end-to-end foundry enterprise.

SANTA CLARA, Calif., and MIGDAL HAEMEK, Israel, Feb. 15, 2022 Intel Company (Nasdaq: INTC) and Tower Semiconductor (Nasdaq: TSEM), a number one foundry for analog semiconductor options, at present introduced a definitive settlement underneath which Intel will purchase Tower for $53 per share in money, representing a complete enterprise worth of roughly $5.4 billion. The acquisition considerably advances Intel’s IDM 2.0 technique as the corporate additional expands its manufacturing capability, world footprint and know-how portfolio to handle unprecedented {industry} demand.

“Tower’s specialty know-how portfolio, geographic attain, deep buyer relationships and services-first operations will assist scale Intel’s foundry companies and advance our aim of turning into a serious supplier of foundry capability globally,” mentioned Pat Gelsinger, Intel CEO. “This deal will allow Intel to supply a compelling breadth of modern nodes and differentiated specialty applied sciences on mature nodes – unlocking new alternatives for present and future prospects in an period of unprecedented demand for semiconductors.”

As a key a part of its IDM 2.0 technique, Intel established Intel Foundry Providers (IFS) in March 2021 to assist meet the rising world demand for semiconductor manufacturing capability and to turn into a serious supplier of U.S.- and Europe-based foundry capability to serve prospects globally. IFS presently provides modern course of and packaging know-how, dedicated capability within the U.S. and Europe and different geographies sooner or later, and a broad mental property (IP) portfolio.

Tower’s experience in specialty applied sciences, corresponding to radio frequency (RF), energy, silicon-germanium (SiGe) and industrial sensors, in depth IP and digital design automation (EDA) partnerships, and established foundry footprint will present broad protection to each Intel and Tower’s prospects globally. Tower serves high-growth markets corresponding to cell, automotive and energy. Tower operates a geographically complementary foundry presence with amenities within the U.S. and Asia serving fabless corporations in addition to IDMs and provides greater than 2 million wafer begins per 12 months of capability – together with development alternatives in Texas, Israel, Italy and Japan. Tower additionally brings a foundry-first buyer strategy with an industry-leading buyer assist portal and IP storefront, in addition to design companies and capabilities.

“With a wealthy historical past, Tower has constructed an unbelievable vary of specialty analog foundry options primarily based upon deep buyer partnerships, with worldwide manufacturing capabilities. I couldn’t be prouder of the corporate and of our proficient and devoted workers,” mentioned Russell Ellwanger, Tower CEO. “Along with Intel, we’ll drive new and significant development alternatives and supply even better worth to our prospects by a full suite of know-how options and nodes and a tremendously expanded world manufacturing footprint. We sit up for being an integral a part of Intel’s foundry providing.”

Dr. Randhir Thakur, president of Intel Foundry Providers, mentioned: “We’re thrilled to welcome the Tower group to Intel. Their a long time of foundry expertise, deep buyer relationships and know-how choices will speed up the expansion of Intel Foundry Providers. We’re constructing Intel Foundry Providers to be a customer-first know-how innovator with the broadest vary of IP, companies and capability. Tower and IFS collectively will present a broad portfolio of foundry options at world scale to allow our prospects’ ambitions.”

Intel is the one modern participant with each analysis and improvement and manufacturing within the U.S., together with just lately introduced capability expansions in Arizona and New Mexico, in addition to plans to construct a brand new mega-site in Ohio. Tower’s know-how and manufacturing footprint is extremely complementary to Intel’s IFS capabilities in modern processes, permitting the mixed firm to offer broader choices to prospects at scale. With the addition of Tower, Intel is strongly positioned to deliver extra worth to prospects throughout the almost $100 billion addressable foundry market.

Transaction Particulars and Timing

The transaction is predicted to be instantly accretive to Intel’s non-GAAP EPS. Intel intends to fund the acquisition with money from the steadiness sheet.

The transaction is predicted to shut in roughly 12 months. It has been unanimously authorized by Intel’s and Tower’s boards of administrators and is topic to sure regulatory approvals and customary closing situations, together with the approval of Tower’s stockholders.

IFS and Tower Semiconductor will run independently till deal closure; IFS will proceed to be led by Thakur, and Tower will proceed to be led by Ellwanger throughout this time. Upon the shut of the transaction, Intel’s intent is for the 2 organizations to turn into a totally built-in foundry enterprise. The corporate will share extra particulars on integration plans at the moment.

Goldman Sachs & Co. LLC served as monetary advisor to Intel; and Skadden, Arps, Slate, Meagher & Flom LLP and Yigal Arnon & Co. served as authorized advisors. J.P. Morgan Securities LLC served as monetary advisor to Tower; and Latham & Watkins, LLP and FISCHER (FBC & Co.) served as authorized advisors.

Transaction Dialogue Audiocast

Intel and Tower administration will host a convention name for buyers, media and {industry} analysts at 5:30 a.m. PST (3:30 p.m. IST) at present to debate the transaction and Intel’s foundry technique. Please go to http://www.directeventreg.com/registration/occasion/4070988 to register for the convention name. The convention name may also be accessed in the USA at 1-888-869-1189 and outdoors the USA at 1-706-643-5902. A replay will probably be out there on Intel’s Investor Relations web site, INTC.com.

Tower Semiconductor Fourth Quarter and Fiscal 12 months 2021 Earnings Launch Replace

Tower will concern its fourth-quarter and monetary 12 months 2021 financials on Feb. 17, 2022. In mild of the introduced transaction, Tower won’t present steerage for the first-quarter 2022 and won’t host an earnings convention name.

About Intel

Intel (Nasdaq: INTC) is an {industry} chief, creating world-changing know-how that allows world progress and enriches lives. Impressed by Moore’s Legislation, we repeatedly work to advance the design and manufacturing of semiconductors to assist deal with our prospects’ biggest challenges. By embedding intelligence within the cloud, community, edge and each sort of computing gadget, we unleash the potential of information to remodel enterprise and society for the higher. To be taught extra about Intel’s improvements, go to newsroom.intel.com and intel.com.

About Tower Semiconductor

Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), the main foundry of excessive worth analog semiconductor options, offers know-how and manufacturing platforms for built-in circuits (ICs) in rising markets corresponding to shopper, industrial, automotive, cell, infrastructure, medical and aerospace and protection. Tower Semiconductor focuses on creating optimistic and sustainable influence on the world by long run partnerships and its superior and modern analog know-how providing, comprised of a broad vary of customizable course of platforms corresponding to SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS picture sensor, non-imaging sensors, built-in energy administration (BCD and 700V), and MEMS. Tower Semiconductor additionally offers world-class design enablement for a fast and correct design cycle in addition to course of switch companies together with improvement, switch, and optimization, to IDMs and fabless corporations. To offer multi-fab sourcing and prolonged capability for its prospects, Tower Semiconductor owns two manufacturing amenities in Israel (150mm and 200mm), two within the U.S. (200mm), three amenities in Japan (two 200mm and one 300mm) which it owns by its 51% holdings in TPSCo and is sharing a 300mm manufacturing facility being established in Italy with ST. For extra info, , please go to: www.towersemi.com.

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