Intel Corp. is close to a deal to acquire Tower Semiconductor Ltd. for reported $5 billion as part of its push into the outsourced chip-manufacturing business, according to sources close to negotiations,The Wall Street Journal reports
- The U.S. chipmaker plans to announce the purchase of the Israeli company by the end of the week
Intel declined to comment on the transaction, while Tower didn’t respond to requests for comment.
*Intel chart on YoY revenues
The move furthers CEO’s Pat Gelsinger’s goal of getting into the chip-foundry business, on manufacturing of semiconductors for other companies.
Tower competes in a market dominated by Taiwan Semiconductor Manufacturing Co., but is much smaller. Its sales are about $1.3 billion annually.
- Tower’s shares jumped as much as 58% to $52.20 in late trading on the news.
The business of providing manufacturing for other companies requires experience in handling different types of chips and designs. Tower makes power management chips, image sensors and a variety of other semiconductors. Its customers include Analog Devices Inc. and Broadcom, according to data compiled by Bloomberg.