In a recent announcement, Intel Corporation (Nasdaq: INTC) disclosed the termination of its planned acquisition of Tower Semiconductor (Nasdaq: TSEM), a move attributed to the challenges in obtaining necessary regulatory approvals within the stipulated timeframe.
The merger agreement, dated February 15, 2022, will be dissolved, and Intel will pay a termination fee of $353 million to Tower Semiconductor as part of the agreement, according to the release.
Intel’s CEO, Pat Gelsinger, commented on the situation, stating, “Our foundry efforts are critical to unlocking the full potential of IDM 2.0, and we continue to drive forward on all facets of our strategy. We are executing well on our roadmap to regain transistor performance and power performance leadership by 2025, building momentum with customers and the broader ecosystem and investing to deliver the geographically diverse and resilient manufacturing footprint the world needs. Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future.”
Stuart Pann, Senior Vice President and General Manager of Intel Foundry Services (IFS), highlighted the accomplishments of Intel Foundry Services since its inception in 2021. He noted that the division has gained significant traction with customers and partners, and its revenue for the second quarter of 2023 witnessed an impressive year-over-year increase of over 300%. Pann emphasized IFS’s unique value proposition as the world’s first open system foundry, encompassing diverse technological offerings such as packaging, chiplet standards, and software, extending beyond traditional wafer manufacturing.
Intel’s strides in its foundry endeavors are further demonstrated through various collaborations and accomplishments. Notably, the company recently entered an agreement with Synopsys to develop a portfolio of intellectual property on Intel 3 and Intel 18A process nodes. Intel secured the first phase of the U.S. Department of Defense’s Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program and engaged five RAMP-C customers in design activities on the Intel 18A node. Additionally, Intel established a multi-generational agreement with Arm to enable low-power compute system-on-chip (SoC) designs on the Intel 18A node, and a strategic partnership with MediaTek to utilize IFS’s advanced process technologies.
This release includes forward-looking statements, highlighting potential risks and uncertainties that could impact Intel’s plans, strategies, and proposed transactions. These factors encompass technological shifts, industry competition, manufacturing complexities, geopolitical conditions, and global supply chain disruptions, among others. The release also underscores that all information reflects Intel management’s views as of the publication date and that Intel does not have an obligation to update the statements unless required by law. For further information, the company’s earnings release from July 27, 2023, and its 2022 Annual Report on Form 10-K are referenced.
This announcement marks a turning point in Intel’s strategic direction, emphasizing its commitment to advancing semiconductor manufacturing through innovative partnerships and initiatives, despite the challenges posed by regulatory complexities.
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