Intel nears US$6bil deal to buy Tower Semiconductor

The potential purchase would deepen Intel’s presence in a space dominated by Taiwan-based TSMC, the world’s largest contract chipmaker.

NEW YORK: Intel Corp is close to buying Israeli firm Tower Semiconductor for about US$6bil (RM25.1bil), a source familiar with the matter said, as the US company looks to advance its strategy of contract manufacturing chips for other businesses.

A deal could be unveiled as soon as this week, the person said, declining to be named as the matter was private.

The potential purchase would deepen Intel’s presence in a space dominated by Taiwan-based TSMC, the world’s largest contract chipmaker.

It comes at time when the global semiconductor shortage has hampered the production of everything from smartphones to cars.

Tower Semiconductor, whose US shares surged 53% in extended trading, specialises in analog chips used in the automotive, mobile, medical and aerospace industries. It had a market capitalisation of US$3.6bil (RM15.1bil) as of Monday’s close. Both Intel and Tower Semiconductor did not immediately respond to requests for comment.

The US chipmaker said it would invest up to US$100bil (RM419bil) to build potentially the world’s largest chip-making complex in Ohio. The move is aimed at restoring Intel’s dominance in chip-making and reducing America’s reliance on Asian manufacturing hubs.Intel was also looking to buy GlobalFoundries for about US$30bil (RM125.6bil), according to a Wall Street Journal report in July, but the chipmaker went public a few months later.

“Chipmaking is expensive and difficult, so most companies either design or produce,” said a source. — Reuters