Intel has announced plans to takeover Israeli company Tower Semiconductor for $5.4 billion.

The chip giant said the move is part of plans to expand its manufacturing capacity, global footprint, and technology portfolio to address “unprecedented industry demand”.

“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 chief executive. “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.”

Last March, Intel established Intel Foundry Services (IFS) with the aim of growing global demand for semiconductor manufacturing capacity and to "become a major provider of US- and Europe-based foundry capacity".

Tower specialises in a number of technologies, including radio frequency (RF), power, silicon-germanium (SiGe) and industrial sensors, extensive IP and electronic design automation (EDA).

“With a rich history, Tower has built an incredible range of specialty analogue foundry solutions based upon deep customer partnerships, with worldwide manufacturing capabilities," said Tower chief executive Russell Ellwanger. "I could not be prouder of the company and of our talented and dedicated employees.

“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.”

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