Intel has acquired Tower Semiconductor for $5.4bn to further expand its manufacturing capacity of semiconductor chips to address unprecedented industry demand.

Announced less than a month since the company unveiled plans announced plans to invest $20bn in a new chip facility, the acquisition marks a very positive move for the semiconductor market.

As gasworld reported late last month, demand for semiconductors is as much as 17% higher in 2021 than it was in 2019, and consumers aren’t seeing commensurate increases in the available supply, according to the US Department of Commerce.

Adding to this strain, the majority of on-stream semiconductor manufacturing facilities are operating at or above 90% utilisation, meaning there is limited additional supply to bring online without building facilities. 

Read more: New semiconductor plants cannot come soon enough

With its latest moves in the space, Intel now stands as a major provider of US- and Europe-based foundry capacity to serve customers globally.

Pat Gelsinger, Intel CEO, said, “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.”

“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.”

Russell Ellwanger, CEO of Tower Semiconductor, added, “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.”