Purchase of Tower Semiconductor Bolsters Intel's Silicon Presence

Intel will acquire Israeli semiconductor solution foundry Tower Semiconductor, in a deal worth $5.4 billion and $53 per share in cash. The acquisition supports Intel’s expansion of its manufacturing capacity, global footprint, and technology portfolio to address what the company said is unprecedented industry demand.

“Tower’s specialty technology portfolio, geographic reach, deep customer relationships, and services-first operations will help scale Intel’s foundry services and advance our goal of becoming a major provider of foundry capacity globally,” Intel CEO Pat Gelsinger said. “This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes, unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors.”

As a key part of its IDM 2.0 strategy, Intel established Intel Foundry Services (IFS) less than one year ago to help meet the growing global demand for semiconductor manufacturing capacity and to become a major provider of U.S.- and Europe-based foundry capacity to serve customers globally.

Tower’s expertise in silicon germanium (SiGe) and industrial sensor technologies, and in radio frequency, power, and the company’s IP and electronic design automation (EDA) partnerships and established foundry footprint will provide broad coverage to both Intel and Tower customers globally. Tower serves high-growth markets such as mobile, automotive, and power. The company operates facilities in the U.S. and Asia serving fabless companies and IDMs and offers more than 2 million wafer starts per year of capacity.

Tower’s silicon photonics platform is offered at Tower Semiconductor’s 200-mm fab in Newport Beach, Calif. The platform features waveguides of both silicon and silicon nitride, germanium photodetectors, PIN-diode based phase shifters, Mach-Zehnder modulators, and standard CMOS-compatible backend metallization.

In December 2021, Tower Semiconductor and Juniper Networks announced what the collaborators pegged as the world’s first open market silicon photonics platform with monolithically integrated III-V lasers. The platform co-integrates III-V lasers, semiconductor optical amplifiers, electro-absorption modulators, and photodetectors with silicon photonics devices, all monolithically on a single chip. This enables smaller, higher-channel count and more power-efficient optical architectures and solutions. Foundry availability will enable a broad array of product developers to create highly integrated PICs for diverse markets.

The companies announced in December that process design kits were expected to be available by the end of 2021, and the first open multiproject wafer run is expected to be offered early in 2022. First samples of full 400- and 800-Gbit/s PIC reference designs with integrated laser are expected to be available in the second quarter of 2022, according to a Dec. 21 press release.

In November, Tower and Anello Photonics formed a partnership for a silicon optical waveguide process technology supporting applications including automotive lidar, biosensing, quantum computing, artificial intelligence, microwave photonics, and optical communications.

In September, Tower partnered with Quintessent, a company specializing in laser integration with silicon PICs, to create a foundry silicon photonics platform with an integrated quantum dot laser. The foundry process will build on Tower’s PH18 production silicon photonics platform and add Quintessent’s III-V quantum dot-based lasers and optical amplifiers to enable a complete suite of active and passive silicon photonic elements. The resulting capability will demonstrate integrated optical gain in a standard foundry silicon photonics process.

Quintessent co-founder John Bowers, a professor at the University of California, Santa Barbara, is one of the first seven researchers participating in the Intel Research Center for Integrated Photonics for Data Center Interconnects. Intel announced the formation of the center in December.

Intel operates both R&D and manufacturing facilities in the U.S., including recently announced capacity expansions in Ariz. and N.M. and plans to build a what it is calling a “mega-site” in Ohio. Intel, in a press release, said Tower’s technology and manufacturing footprint is highly complementary to its IFS capabilities in leading-edge processes. This allows the combined company to provide broader offerings to customers at scale.

The transaction is expected to close in approximately one year, and it has been unanimously approved by Intel’s and Tower’s boards. It is subject to certain regulatory approvals and customary closing conditions, including the approval of Tower’s stockholders.

IFS and Tower Semiconductor will run independently until deal closure. Upon the close of the transaction, Intel’s intent is for the two organizations to become a fully integrated foundry business.