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Jiwei Network reported that following AMD's acquisition of Xilinx, another important merger and acquisition occurred in the semiconductor industry. On February 15, according to the official announcement, Intel will acquire Tower Semiconductor, an Israeli wafer foundry, for $5.4 billion (about 34.28 billion yuan). Given that Tower Semiconductor's market capitalization is about $3.6 billion, the deal could include a huge premium.
Since announcing the IDM 2.0 strategy, Intel has continued to focus on the foundry business. The acquisition will significantly accelerate Intel's position as a major global supplier of foundry services and capacity, and provide the industry with a broader portfolio of differentiated technologies. However, in the context of global core shortage, as semiconductor manufacturers are working on wafer foundries, the challenges faced by Intel cannot be ignored.
Tower Semiconductor is difficult to escape being acquired?
According to the data, Gaota Semiconductor was founded in 1993 led by the Israeli government and listed on the NASDAQ and Tel Aviv stock exchanges in the United States in 1994. Since its inception, Gaota Semiconductor has successively acquired fabs of National Semiconductor, Micron, Maxim Integrated Products and other companies, as well as wafer foundry company Jazz Semiconductor.
After nearly three decades of hard work, High Tower Semiconductor has developed into a banner for israel's semiconductor industry. According to the statistics of the research agency Jibang Consulting, in the third quarter of 2021, Gaota Semiconductor ranked ninth among the world's wafer foundries, with a market share of 1.4%. During the same period, the company achieved revenue of US$387 million (about 2.4 billion yuan), an increase of 6.9% sequentially.
In terms of product categories, Gaota Semiconductor mainly produces various types of analog chips, CMOS, discrete devices, MEMS, etc., and is widely used in many fields such as automotive, consumer products, medical and industrial equipment. In addition, GT Semiconductor provides process transfer services to IDM and Fabless companies, including development, transfer and extensive optimization as defined by customer needs.
According to the official website, Gaota Semiconductor currently has seven fabs in Israel, the United States, Japan and other places, including two fabs (6 inches and 8 inches) in MiGdale Emek in Israel, two 8-inch fabs in California and Texas, and three fabs (two 8-inch and one 12-inch) in Cooperation with Panasonic in Japan.
It is worth noting that due to the scale of the domestic market, although Israel lacks large semiconductor companies, small and medium-sized enterprises compete for glory, and mergers and acquisitions at home and abroad are frequent. As early as 2019, Nvidia's acquisition of Mellanox for $6.9 billion in cash, and Intel's announcement of a $2 billion acquisition of Habana Labs, an Israeli data center AI chip maker, caused a lot of shock in the industry.
In addition, combing through history, Intel can be called the "godfather" of Israeli semiconductors, and since the establishment of the first overseas design center in Haifa, Israel in 1974, it has helped the country incubate a large number of semiconductor companies, so it has a deep connection with high-tower semiconductors. In addition, in the face of the current global lack of core environment and Intel's ambition to improve chip manufacturing capabilities, Gaota Semiconductor may not escape the fate of mergers and acquisitions.
Intel is ramping up its wafer foundry
Since the announcement of the IDM 2.0 strategy in 2021, which includes wafer foundry, Intel has made frequent moves. Late last month, Intel announced that it would invest up to $100 billion to build what could be the world's largest chip manufacturing plant in Ohio to restore Intel's dominance in chip manufacturing and reduce U.S. dependence on Asia's semiconductor manufacturing industry.
Due to the large, time-consuming, and difficult fab investment, Intel is rapidly expanding its chip manufacturing capabilities in various ways. As early as last July, foreign media broke the news that Intel planned to acquire the American wafer foundry GF for $30 billion. But then the news was denied by GF. In October 2021, with GF's launch on the NASDAQ, the plan was discontinued.
At the end of last year, taiwan media "Economic Daily" reported that Intel actively expanded its global layout after launching the IDM 2.0 strategy. According to industry reports, Intel's internal plans will expand 30% of fab capacity within five years by 2026, including increasing production capacity in Ireland, Israel and the United States from 2023 to 2024. It can be seen that the acquisition of Gaota Semiconductor is an important measure to increase its production capacity.
As for why Intel acquired Tower Semiconductor? First of all, the current global semiconductor shortage is affecting many fields such as automobiles and home appliances, and this acquisition will increase Intel's share in chip manufacturing. According to foreign media quoting people familiar with the matter, this high-premium acquisition is mainly to support the plans of other companies to make more chips. Intel's commitment is evident.
Secondly, although the current analog chips of Gaota Semiconductor are not the most advanced in technology, their business is very stable under normal circumstances and the product life cycle is relatively long. It is reported that Intel also valued the rich experience and customer relationship of tall tower semiconductors in the industry. After the acquisition, Intel can not only expand the scope of foundry services, but also have a larger customer base.
In the official statement, Intel CEO Pat Kissinger said, "In an era of unprecedented demand for semiconductors, The technical portfolio, geographical coverage, deep customer relationships and service-oriented business philosophy of High Tower Semiconductor will help expand Intel's foundry services and advance our goal of becoming a major global foundry and providing advanced differentiated technologies." ”
epilogue
In the global core shortage situation, chip manufacturing, as a key link in the semiconductor supply chain, has become the focus of the semiconductor and even the global electronics industry. At present, Intel has made frequent moves in wafer manufacturing, repeatedly announcing that it will build new factories in Europe and the United States, and at the same time making efforts to acquire this means of rapidly expanding manufacturing capabilities. Through the "two-pronged" strategy, Intel's wafer foundry capabilities are rapidly improving.
However, in the face of the current industrial development situation, the world's semiconductor manufacturers are also concentrating on wafer foundry, including SK Hynix's acquisition of South Korean wafer foundry manufacturer Key Foundry, while TSMC, UMC, Samsung, GF and other wafer foundries have announced significant expansion of capital expenditure to increase production capacity. In this regard, Intel's challenges in improving its wafer manufacturing capabilities should not be underestimated.
(Proofreading/Hidden Dracy)