Intel didn't purchase Tower but will continue its collaborative 300mm production

 11th Gen Intel Core i9-11900K
11th Gen Intel Core i9-11900K

What you need to know

  • A merger agreement between Intel and Tower Semiconductor was dissolved in August after regulatory bodies blocked it.

  • Despite this, Intel Foundry Services and Tower Semiconductor have agreed to continue collaborative efforts.

  • Intel will provide foundry services and 300mm manufacturing capacity to Tower Semiconductor.

  • In exchange, Tower will invest $300 million in Intel to acquire manufacturing and other fixed assets for its New Mexico facility.

The attempted acquisition of Tower Semiconductor by Intel was tanked by regulators in China and dissolved in August, but the companies will not be parting ways. Instead, they have agreed to support each other in the future. According to a press release from Intel, sourced from a report by Tom's Hardware, Intel will provide Tower with foundry services and its 300mm manufacturing capacity.

In addition to expanding Tower's foundry footprint, Intel will also manufacture Tower's 65-nanometer power management bipolar-CMOS-DMOS flows at Intel's Fab 11X plant in Rio Rancho, New Mexico. The agreement is not one-sided, as Tower will invest up to $300 million to acquire and own equipment and other assets for its own New Mexico facility that will provide a new capacity corridor of more than 600,000 photo layers per month.

This collaboration with Intel allows us to fulfill our customers’ demand roadmaps, with a particular focus on advanced power management and radio frequency silicon on insulator (RF SOI) solutions, with full process flow qualification planned in 2024.

The increased capacity will accommodate customer demands for 300 mm advanced analog processing. Intel Senior Vice President and General Manager of Intel Foundry Services, Stuart Pann, also prepared a statement about the agreement:

“We launched Intel Foundry Services with a long-term view of delivering the world’s first open system foundry that brings together a secure, sustainable, and resilient supply chain with the best of Intel and our ecosystem. We’re thrilled that Tower sees the unique value we provide and chose us to open their 300 mm U.S. capacity corridor.”

Intel is preparing its 15th Gen chips, dubbed 'Arrow Lake,' which are expected to offer significant performance boosts over the recently refreshed Raptor Lake series. The manufacturer has been instrumental in supporting the CHIPS and Science Act, passed in the U.S. in 2022.

The act was an effort to return the manufacturing of semiconductors and processing chips to the U.S. that took root following severe shortages that affected its infrastructure and military defense efforts. Intel and Tower Semiconductors will both be focusing their manufacturing expansions in the United States.