Acquisition accelerates Intel’s global,
end-to-end foundry business.
NEWS HIGHLIGHTS
- Transaction creates a globally diverse end-to-end foundry to
help meet growing semiconductor demand and brings more value to
customers across the nearly $100 billion addressable foundry
market.
- Acquisition accelerates Intel’s path to becoming a major
provider of foundry services and capacity globally, now offering
one of the industry’s broadest portfolios of differentiated
technology.
- Highly complementary transaction brings together Intel’s
leading-edge nodes and scale manufacturing with Tower
Semiconductor’s specialty technologies and customer-first approach
to deliver leading technology and manufacturing capabilities and
enhanced value to customers globally.
- Transaction is expected to be immediately accretive to Intel’s
non-GAAP EPS.
- Intel and Tower Semiconductor management will host a conference
call for investors, media and industry analysts today at 5:30 a.m.
PST (3:30 p.m. Israel Standard Time) to provide further details on
the transaction.
Intel Corporation (Nasdaq: INTC) and Tower Semiconductor
(Nasdaq: TSEM), a leading foundry for analog semiconductor
solutions, today announced a definitive agreement under which Intel
will acquire Tower for $53 per share in cash, representing a total
enterprise value of approximately $5.4 billion. The acquisition
significantly advances Intel’s IDM 2.0 strategy as the company
further expands its manufacturing capacity, global footprint and
technology portfolio to address unprecedented industry demand.
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Intel and Tower Semiconductor on Feb. 15,
2022, announced a definitive agreement under which Intel will
acquire Tower for $53 per share in cash, representing a total
enterprise value of approximately $5.4 billion. (Credit: Intel
Corporation and Tower Semiconductor)
“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,” said Pat Gelsinger,
Intel CEO. “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) in March 2021 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. IFS currently offers leading-edge
process and packaging technology, committed capacity in the U.S.
and Europe and other geographies in the future, and a broad
intellectual property (IP) portfolio.
Tower’s expertise in specialty technologies, such as radio
frequency (RF), power, silicon-germanium (SiGe) and industrial
sensors, extensive IP and electronic design automation (EDA)
partnerships, and established foundry footprint will provide broad
coverage to both Intel and Tower’s customers globally. Tower serves
high-growth markets such as mobile, automotive and power. Tower
operates a geographically complementary foundry presence with
facilities in the U.S. and Asia serving fabless companies as well
as IDMs and offers more than 2 million wafer starts per year of
capacity – including growth opportunities in Texas, Israel, Italy
and Japan. Tower also brings a foundry-first customer approach with
an industry-leading customer support portal and IP storefront, as
well as design services and capabilities.
“With a rich history, Tower has built an incredible range of
specialty analog foundry solutions based upon deep customer
partnerships, with worldwide manufacturing capabilities. I could
not be prouder of the company and of our talented and dedicated
employees,” said Russell Ellwanger, Tower CEO. “Together with
Intel, we will drive new and meaningful growth opportunities and
offer even greater value to our customers through a full suite of
technology solutions and nodes and a greatly expanded global
manufacturing footprint. We look forward to being an integral part
of Intel’s foundry offering.”
Dr. Randhir Thakur, president of Intel Foundry Services, said:
“We are thrilled to welcome the Tower team to Intel. Their decades
of foundry experience, deep customer relationships and technology
offerings will accelerate the growth of Intel Foundry Services. We
are building Intel Foundry Services to be a customer-first
technology innovator with the broadest range of IP, services and
capacity. Tower and IFS together will provide a broad portfolio of
foundry solutions at global scale to enable our customers’
ambitions.”
Intel is the only leading-edge player with both research and
development and manufacturing in the U.S., including recently
announced capacity expansions in Arizona and New Mexico, as well as
plans to build a new mega-site in Ohio. Tower’s technology and
manufacturing footprint is highly complementary to Intel's IFS
capabilities in leading-edge processes, allowing the combined
company to provide broader offerings to customers at scale. With
the addition of Tower, Intel is strongly positioned to bring more
value to customers across the nearly $100 billion addressable
foundry market.
Transaction Details and Timing
The transaction is expected to be immediately accretive to
Intel’s non-GAAP EPS. Intel intends to fund the acquisition with
cash from the balance sheet.
The transaction is expected to close in approximately 12 months.
It has been unanimously approved by Intel’s and Tower’s boards of
directors and 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; IFS will continue to be led by Thakur, and Tower will
continue to be led by Ellwanger during this time. Upon the close of
the transaction, Intel’s intent is for the two organizations to
become a fully integrated foundry business. The company will share
more details on integration plans at that time.
Goldman Sachs & Co. LLC served as financial advisor to
Intel; and Skadden, Arps, Slate, Meagher & Flom LLP and Yigal
Arnon & Co. served as legal advisors. J.P. Morgan Securities
LLC served as financial advisor to Tower; and Latham & Watkins,
LLP and FISCHER (FBC & Co.) served as legal advisors.
Transaction Discussion Audiocast
Intel and Tower management will host a conference call for
investors, media and industry analysts at 5:30 a.m. PST (3:30 p.m.
IST) today to discuss the transaction and Intel’s foundry strategy.
Please visit
http://www.directeventreg.com/registration/event/4070988 to
register for the conference call. The conference call can also be
accessed in the United States at 1-888-869-1189 and outside the
United States at 1-706-643-5902. A replay will be available on
Intel’s Investor Relations website, INTC.com.
Tower Semiconductor Fourth Quarter and Fiscal Year 2021
Earnings Release Update
Tower will issue its fourth-quarter and fiscal year 2021
financials on Feb. 17, 2022. In light of the announced transaction,
Tower will not provide guidance for the first-quarter 2022 and will
not host an earnings conference call.
About Intel
Intel (Nasdaq: INTC) is an industry leader, creating
world-changing technology that enables global progress and enriches
lives. Inspired by Moore’s Law, we continuously work to advance the
design and manufacturing of semiconductors to help address our
customers’ greatest challenges. By embedding intelligence in the
cloud, network, edge and every kind of computing device, we unleash
the potential of data to transform business and society for the
better. To learn more about Intel’s innovations, go to
newsroom.intel.com and intel.com.
About Tower Semiconductor
Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), the leading
foundry of high-value analog semiconductor solutions, provides
technology and manufacturing platforms for integrated circuits
(ICs) in growing markets such as consumer, industrial, automotive,
mobile, infrastructure, medical, and aerospace and defense. Tower
Semiconductor focuses on creating positive and sustainable impact
on the world through long-term partnerships and its advanced and
innovative analog technology offering, comprised of a broad range
of customizable process platforms such as SiGe, BiCMOS,
mixed-signal/CMOS, RF CMOS, CMOS image sensor, non-imaging sensors,
integrated power management (BCD and 700V), and MEMS. Tower
Semiconductor also provides world-class design enablement for a
quick and accurate design cycle as well as process transfer
services including development, transfer, and optimization, to IDMs
and fabless companies. To provide multi-fab sourcing and extended
capacity for its customers, Tower Semiconductor owns two
manufacturing facilities in Israel (150mm and 200mm), two in the
U.S. (200mm), three facilities in Japan (two 200mm and one 300mm)
which it owns through its 51% holdings in TPSCo and is sharing a
300mm manufacturing facility being established in Italy with ST
Microelectronics. For information, please visit:
www.towersemi.com.
Forward-Looking Statements
This document contains certain forward-looking statements within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, related to the
proposed transaction between Intel and Tower Semiconductor,
including statements regarding the benefits and the timing of the
transaction as well as statements regarding the companies’ products
and markets. Words such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “forecast,” “intend,” “likely,” “may,”
“plan,” “potential,” “project,” “predict,” “seek,” “should,”
“target,” “would” and “will” and variations of such words and
similar expressions are intended to identify such forward-looking
statements. Such statements are based on management’s expectations
as of the date they were first made and involve risks and
uncertainties that could cause our actual results to differ
materially from those expressed or implied in our forward-looking
statements. Such risks and uncertainties include, among others, the
risk that the transaction may not be completed in a timely manner
or at all, which may adversely affect the companies’ businesses and
the price of their securities; uncertainties as to the timing of
the consummation of the transaction and the potential failure to
satisfy the conditions to the consummation of the transaction,
including the receipt of certain governmental and regulatory
approvals; the potential for regulatory authorities to require
divestitures, behavioral remedies or other concessions in order to
obtain their approval of the proposed transaction; the occurrence
of any event, change or other circumstance that could give rise to
the termination of the merger agreement; the effect of the
announcement or pendency of the transaction on Intel’s business
relationships, operating results, and business generally; delays,
disruptions or increased costs in the integration of Tower
Semiconductor’s technology into existing or new products; the
potential that Tower Semiconductor shareholders may not approve the
transaction; expected benefits, including financial benefits, of
the transaction may not be realized; integration of the acquisition
post-closing may not occur as anticipated, and the combined
companies’ ability to achieve the growth prospects and synergies
expected from the transaction, as well as delays, challenges and
expenses associated with integrating the combined companies’
existing businesses may incur; litigation related to the
transaction or otherwise; unanticipated restructuring costs may be
incurred or undisclosed liabilities assumed; attempts to retain key
personnel and customers may not succeed; risks related to diverting
management’s attention from Intel’s ongoing business operations;
exposure to inflation, currency rate and interest rate fluctuations
and risks associated with doing business locally and
internationally, as well as fluctuations in the market price of
Intel and Tower Semiconductor’s traded securities; the impact of
the COVID-19 pandemic on Intel and Tower Semiconductor’s business
and general economic conditions; demands in Tower Semiconductor’s
customer end markets and for Tower Semiconductor’s foundry services
and/or products that exceed Tower Semiconductor’s capacity; ongoing
or potential litigations or disputes, incidental to the conduct of
Tower Semiconductor's ongoing business, with customers, suppliers,
landlords, or other third parties; the business combination or the
combined company’s products may not be supported by third parties;
actions by competitors may negatively impact results; potential
adverse reactions or changes to business relationships resulting
from the announcement or completion of the transaction; potential
negative changes in general economic conditions in the regions or
the industries in which Intel and Tower Semiconductor operate;
potential failure to meet the conditions set in the approval
certificates received from the Israeli Investment Center under
which Tower Semiconductor received a significant amount of grants
in past years; exposure to inflation, currency rates (mainly the
Israeli Shekel and Japanese Yen); and other risks detailed in
Intel’s and Tower Semiconductor’s filings with the Securities and
Exchange Commission (the “SEC”) including those discussed in
Intel’s most recent Annual Report on Form 10-K and in any
subsequent periodic reports on Form 10-Q and Form 8-K and Tower
Semiconductor’s most recent Annual Report on Form 20-F and in any
subsequent reports on Form 6-K, each of which is on file with or
furnished to the SEC and available at the SEC’s website at
www.sec.gov. SEC filings for Intel are also available on Intel’s
Investor Relations website at www.intc.com, and SEC filings for
Tower Semiconductor are available in the Investor Relations section
of Tower Semiconductor’s website at ir.towersemi.com. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. Unless otherwise
required by applicable law, Intel and Tower Semiconductor undertake
no obligation and do not intend to update these forward-looking
statements, whether as a result of new information, future events
or otherwise.
Additional Information and Where to Find It
This communication is being made in respect of the proposed
transaction. Tower Semiconductor intends to furnish to the SEC and
mail or otherwise provide to its shareholders a proxy statement in
connection with the proposed transaction with Intel (the “proxy
statement”), and each party will file or furnish other documents
regarding the proposed transaction with the SEC. The proxy
statement will be sent or given to the shareholders of Tower
Semiconductor and will contain important information about the
proposed transaction and related matters. This communication is not
a substitute for the proxy statement or any other document that may
be filed or furnished by Tower Semiconductor with the SEC.
Investors and security holders are urged to read the proxy
statement in its entirety and other relevant documents filed with
or furnished to the SEC in connection with the proposed transaction
or incorporated by reference therein when they become available
before making any voting or investment decision with respect to the
proposed transaction because they will contain important
information about the proposed transaction and the parties to the
proposed transaction.
You may obtain copies of all documents filed with or furnished
to the SEC regarding this transaction, free of charge, at the SEC’s
website (www.sec.gov). In addition, investors and shareholders will
be able to obtain free copies of the proxy statement and other
documents filed with or furnished to the SEC by Intel on Intel’s
Investor Relations website (www.intc.com) or by writing to Intel,
Investor Relations, 2200 Mission College Blvd., Santa Clara, CA
95054 (for documents filed with the SEC by Intel), or by Tower
Semiconductor on Tower Semiconductor’s Investor Relations website
(ir.towersemi.com) or by writing to Tower Semiconductor, Corporate
Secretary, 20 Shaul Amor Street, Ramat Gavriel Industrial Park,
P.O. Box 619, Migdal Haemek 2310502, Israel (for documents filed
with or furnished to the SEC by Tower Semiconductor).
© Intel Corporation. Intel, the Intel logo and other Intel marks
are trademarks of Intel Corporation or its subsidiaries. Other
names and brands may be claimed as the property of others.
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Penelope Bruce Intel Media Relations 1-408-893-0601
Penelope.Bruce@intel.com
Kenji Morita Intel Investor Relations 1-408-765-7700
Kenji.Morita@intel.com
Noit Levy Tower Semiconductor Investor Relations and Corporate
Communications +972-4-604-7066 noitle@towersemi.com
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