Intel will make chips for Tower Semiconductor after failed takeover

Intel will produce chips for Tower Semiconductor. Intel wanted to acquire Tower, but that did not happen because approval from authorities was not forthcoming. Intel will make capacity available at its factory in the US state of New Mexico.

This concerns 65nm chips for Tower, Intel reports. Tower will pay around $300 million for equipment at the factory to produce the chips. This will return a large part of the money that Intel has to pay to Tower for canceling the takeover. Intel must pay Tower $353 million as a termination fee. The companies announced a few weeks ago that the takeover was not going ahead.

Intel and Tower already announced that they wanted to continue working together. With the acquisition, Intel aimed to accelerate becoming a “major provider of foundry services and capabilities” as part of its IDM 2.0 strategy. The acquisition cost $5.4 billion. Tower produces 150mm, 200mm and 300mm wafers for, for example, automotive chips, image sensors and power management chips.