According to foreign media reports, processor leader Intel announced as soon as this week that it will acquire Israeli high-wafer foundry Tower Semiconductor for $6 billion. Market participants said that after Intel announced its IDM 2.0 plan to return to foundry, in addition to building a new wafer fab to expand production capacity, and developing advanced processes to challenge TSMC and Samsung, through mergers and acquisitions of mature process peers, it has acquired existing customers of the acquiree. Based on the foundation, there are more fab operators and technologies, which can kill two birds with one stone.
After Intel announced the IDM 2.0 plan in 2021, CEO Pat Gelsinger said that there are three major parts of the key projects, most products are produced by themselves, third-party foundry cooperation, and return to the foundry market. In the self-produced part, each process developed smoothly, and the renamed Intel 7, 4, 3, 20A, and 18A were all carried out according to the procedures. In terms of third-party foundry cooperation, TSMC, UMC, Samsung, GlobalFoundries and other manufacturers are all partners. Focusing on returning to the foundry market, more than 100 customers such as Qualcomm and Amazon are currently interested.
Market participants said that, returning to the foundry market, Intel expects a total investment of 100 billion US dollars in the next 10 years, planning to build two new wafer fabs in Arizona, and the Columbus, Ohio area to invest 20 billion US dollars to build wafers The factory does not even rule out the establishment of a fab in Europe to improve advanced process technology and production capacity, and challenge the market leaders TSMC and South Korea’s Samsung.
In addition to advanced processes, the current production capacity of mature processes is seriously insufficient, which makes the foundry prices continue to rise. Although the price of the product is not higher than that of the advanced manufacturing process, most automotive electronic semiconductors are concentrated on mature manufacturing processes. The volume is large and the market demand continues to rise. It will be a stable source of income and become an area of concern for Intel. The news that GlobalFoundries is courting; but the result is that GlobalFoundries ruled out the possibility and went on the road to IPO. After losing the opportunity to acquire GlobalFoundries, Intel’s mature process did not give up the possibility of acquisition, so there was news of the acquisition of Israel’s High Tower Semiconductor.
In addition to the original 6-inch fab and 8-inch fab, High Tower Semiconductor also acquired Jazz Semiconductor’s 8-inch fab in 2008, becoming its third fab, expanding its global production capacity. On April 1, 2014, Tower Semiconductor and Japan’s Panasonic jointly established a new company “Panasonic TowerJazz Semiconductor”. Panasonic transferred its three semiconductor factories including Uozu Factory, Tonami Factory and Arai Factory to the new joint venture company. High Tower Semiconductor holds a 51% stake in the joint venture, which is equivalent to Panasonic’s sale of three semiconductor factories to High Tower Semiconductor. According to the latest report of “TrendForce”, in the third quarter of 2021, the global foundry market share of Gota Semiconductor was 1.4%, and the top ten manufacturers ranked ninth, with revenue increasing by 6.9% compared with the second quarter.
Although Intel has no shortage of fab management experience and talents, most of Intel’s foundry business only serves large-scale system and IC design business, lacking hundreds of mature process products and hundreds of customers with fab operation experience . After the acquisition of Gaota Semiconductor, it is equivalent to obtaining management talents at the same time, which makes Intel’s mature process wafer foundry market business more handy. The most rare thing is to obtain a large number of mature process technologies in one fell swoop. It does not need to spend time on redevelopment and quickly serves Gaota Semiconductor. Existing customers can even expand the market. From the above perspective, these assets are acquired for US$6 billion. Compared with GlobalFoundries, which has a market share of 6.1% for US$30 billion, Intel’s acquisition of Tower Semiconductor seems to be more valuable if it succeeds.