Intel to Buy Israel’s Tower Semiconductor for $5.4B

Intel announced that it will acquire Israeli chipmaker Tower Semiconductor as it pushes for more specialized production amid soaring global demand for semiconductors.

Intel said in a statement on Tuesday that it will pay $53 per share in cash for Tower, totaling about $5.4 billion. The offer was well above Tower’s closing share price of $33.13 on the Nasdaq on Monday.

Shares of Tower went up over 40% in Tel Aviv on Tuesday after news of the possible acquisition.

The move is seen as part of Intel CEO Pat Gelsinger’s push to compete with Taiwan Semiconductor Manufacturing Co., the world’s largest chipmaker, by building new factories and specializing its own chips.

Tower produces specialized circuits used for cars, consumer products, and medical and industrial equipment, mainly serving companies that design chips but outsources manufacturing.

The transaction has been approved by Intel’s and Tower’s boards of directors, Intel said, and is expected to close in 12 months.

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