Intel’s custom chip manufacturing division has suffered a setback. Nothing will come of the planned takeover of the Israeli chip contract manufacturer Tower Semiconductor. The two companies were not able to complete the acquisition by the contractual deadline because the authorities had not yet given the go-ahead.
Tower writes in its own statement: “After careful consideration and in-depth discussions and in the absence of any indication of any specific regulatory approvals required, both parties have agreed to terminate their merger agreement after the expiration of August 15, 2023.”
On the so-called outside date, the companies involved determine when a takeover must be completed. If this does not work in time, one of the two parties can cancel the procedure. Intel is now paying a $353 million contractual rescission fee. The acquisition would have cost around $5.4 billion.
Tower Semiconductor specializes in analog semiconductor devices, including many electronic components such as High Electron Mobility Transistors (HEMT) and more complex Power Management Circuits (PMICs). They are produced on 150 to 300 mm silicon wafers with structure widths from 65 nanometers to 1 micrometer (1000 nm). These are typical processes for analog circuits and sensors, for example.
Tower operates a total of five semiconductor plants in Israel, Italy and the USA, and the company also has interests in three Japanese semiconductor plants. The company was interesting for Intel, especially because of its know-how about automotive components. The capacities for analog chips should be integrated into the Intel Foundry Services (IFS). Intel could have put together larger packages for automakers.
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