Two weeks after withdrawing its bid to purchase Tower Semiconductor for $5.4 billion owing to regulatory opposition, Intel has announced a contract to provide foundry services and manufacturing capacity to the firm.
In accordance with the new agreement, Tower will invest up to $300 million to purchase and own machinery and other assets that will be put in the US state of New Mexico-based Intel Foundry Services’ manufacturing facility.
As part of the agreement, Intel has agreed to produce Tower’s 65-nanometer power management BCD (bipolar-CMOS-DMOS) flows. Tower operates its own manufacturing plants in Israel (150mm and 200mm), the United States (200mm), Japan (200mm and 300mm), and shortly Italy, thanks to a partnership with STMicroelectronics.
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According to Intel, this agreement would enable Tower to provide complex analogue processing for 300mm and meet anticipated client demand while increasing its monthly capacity by approximately 600,000 photo layers.
Due to difficulties in getting crucial regulatory licenses, particularly in China, Intel had to abandon the plan to buy Israel’s Tower Semiconductor for $5.4 billion last month. According to the terms of the contract, Tower would get a $353 million termination fee from Intel.
“We started Intel Foundry Services with the long-term goal of offering the first open system foundry in the world, combining the best of Intel and our ecosystem with a safe, sustainable, and resilient supply chain. We’re happy that Tower recognizes the special value we offer and chose us to launch their 300mm U.S. capacity corridor,” said Stuart Pann, senior vice president of Intel and general manager of Intel Foundry Services.
