Intel to Acquire Tower Semiconductor for $5.4 Billion

Acqui짯si짯ti짯on acce짯le짯ra짯tes Intel셲 glo짯bal, end-to-end foundry business.

NEWS HIGHLIGHTS

  • Tran짯sac짯tion crea짯tes a glo짯bal짯ly diver짯se end-to-end foundry to help meet gro짯wing semi짯con짯duc짯tor demand and brings more value to cus짯to짯mers across the near짯ly $100 bil짯li짯on addressa짯ble foundry market. 
  • Acqui짯si짯ti짯on acce짯le짯ra짯tes Intel셲 path to beco짯ming a major pro짯vi짯der of foundry ser짯vices and capa짯ci짯ty glo짯bal짯ly, now offe짯ring one of the industry셲 broa짯dest port짯fo짯li짯os of dif짯fe짯ren짯tia짯ted technology. 
  • High짯ly com짯ple짯men짯ta짯ry tran짯sac짯tion brings tog짯e짯ther Intel셲 lea짯ding-edge nodes and sca짯le manu짯fac짯tu짯ring with Tower Semiconductor셲 spe짯cial짯ty tech짯no짯lo짯gies and cus짯to짯mer-first approach to deli짯ver lea짯ding tech짯no짯lo짯gy and manu짯fac짯tu짯ring capa짯bi짯li짯ties and enhan짯ced value to cus짯to짯mers globally.
  • Tran짯sac짯tion is expec짯ted to be imme짯dia짯te짯ly accre짯ti짯ve to Intel셲 non-GAAP EPS.
  • Intel and Tower Semi짯con짯duc짯tor manage짯ment will host a con짯fe짯rence call for inves짯tors, media and indus짯try ana짯lysts at 5:30 a.m. PST today (3:30 p.m. Isra짯el Stan짯dard Time) to pro짯vi짯de fur짯ther details on the transaction. 

SANTA CLARA, Calif., and MIGDAL HAEMEK, Isra짯el, Feb. 15, 2022 Intel Cor짯po짯ra짯ti짯on (Nasdaq: INTC) and Tower Semi짯con짯duc짯tor (Nasdaq: TSEM), a lea짯ding foundry for ana짯log semi짯con짯duc짯tor solu짯ti짯ons, today announ짯ced a defi짯ni짯ti짯ve agree짯ment under which Intel will acqui짯re Tower for $53 per share in cash, repre짯sen짯ting a total enter짯pri짯se value of appro짯xi짯m짯ate짯ly $5.4 bil짯li짯on. The acqui짯si짯ti짯on signi짯fi짯cant짯ly advan짯ces Intel셲 IDM 2.0 stra짯tegy as the com짯pa짯ny fur짯ther expands its manu짯fac짯tu짯ring capa짯ci짯ty, glo짯bal foot짯print and tech짯no짯lo짯gy port짯fo짯lio to address unpre짯ce짯den짯ted indus짯try demand.

Tower셲 spe짯cial짯ty tech짯no짯lo짯gy port짯fo짯lio, geo짯gra짯phic reach, deep cus짯to짯mer rela짯ti짯onships and ser짯vices-first ope짯ra짯ti짯ons will help sca짯le Intel셲 foundry ser짯vices and advan짯ce our goal of beco짯ming a major pro짯vi짯der of foundry capa짯ci짯ty glo짯bal짯ly, said Pat Gel짯sin짯ger, Intel CEO. 쏷his deal will enable Intel to offer a com짯pel짯ling breadth of lea짯ding-edge nodes and dif짯fe짯ren짯tia짯ted spe짯cial짯ty tech짯no짯lo짯gies on matu짯re nodes unlo짯cking new oppor짯tu짯ni짯ties for exis짯ting and future cus짯to짯mers in an era of unpre짯ce짯den짯ted demand for semiconductors.

As a key part of its IDM 2.0 stra짯tegy, Intel estab짯lished Intel Foundry Ser짯vices (IFS) in March 2021 to help meet the gro짯wing glo짯bal demand for semi짯con짯duc짯tor manu짯fac짯tu짯ring capa짯ci짯ty and to beco짯me a major pro짯vi짯der of U.S.- and Euro짯pe-based foundry capa짯ci짯ty to ser짯ve cus짯to짯mers glo짯bal짯ly. IFS curr짯ent짯ly offers lea짯ding-edge pro짯cess and pack짯a짯ging tech짯no짯lo짯gy, com짯mit짯ted capa짯ci짯ty in the U.S. and Euro짯pe and other geo짯gra짯phies in the future, and a broad intellec짯tu짯al pro짯per짯ty (IP) portfolio. 

Tower셲 exper짯ti짯se in spe짯cial짯ty tech짯no짯lo짯gies, such as radio fre짯quen짯cy (RF), power, sili짯con-ger짯ma짯ni짯um (SiGe) and indus짯tri짯al sen짯sors, exten짯si짯ve IP and elec짯tro짯nic design auto짯ma짯ti짯on (EDA) part짯ner짯ships, and estab짯lished foundry foot짯print will pro짯vi짯de broad covera짯ge to both Intel and Tower셲 cus짯to짯mers glo짯bal짯ly. Tower ser짯ves high-growth mar짯kets such as mobi짯le, auto짯mo짯ti짯ve and power. Tower ope짯ra짯tes a geo짯gra짯phi짯cal짯ly com짯ple짯men짯ta짯ry foundry pre짯sence with faci짯li짯ties in the U.S. and Asia ser짯ving fab짯less com짯pa짯nies as well as IDMs and offers more than 2 mil짯li짯on wafer starts per year of capa짯ci짯ty inclu짯ding growth oppor짯tu짯ni짯ties in Texas, Isra짯el, Ita짯ly and Japan. Tower also brings a foundry-first cus짯to짯mer approach with an indus짯try-lea짯ding cus짯to짯mer sup짯port por짯tal and IP store짯front, as well as design ser짯vices and capabilities. 

With a rich histo짯ry, Tower has built an incre짯di짯ble ran짯ge of spe짯cial짯ty ana짯log foundry solu짯ti짯ons based upon deep cus짯to짯mer part짯ner짯ships, with world짯wi짯de manu짯fac짯tu짯ring capa짯bi짯li짯ties. I could not be prou짯der of the com짯pa짯ny and of our talen짯ted and dedi짯ca짯ted employees, said Rus짯sell Ell짯wan짯ger, Tower CEO. 쏷og짯e짯ther with Intel, we will dri짯ve new and meaningful growth oppor짯tu짯ni짯ties and offer even grea짯ter value to our cus짯to짯mers through a full suite of tech짯no짯lo짯gy solu짯ti짯ons and nodes and a great짯ly expan짯ded glo짯bal manu짯fac짯tu짯ring foot짯print. We look for짯ward to being an inte짯gral part of Intel셲 foundry offering. 

Dr. Rand짯hir Tha짯kur, pre짯si짯dent of Intel Foundry Ser짯vices, said: 쏻e are thril짯led to wel짯co짯me the Tower team to Intel. Their deca짯des of foundry expe짯ri짯ence, deep cus짯to짯mer rela짯ti짯onships and tech짯no짯lo짯gy offe짯rings will acce짯le짯ra짯te the growth of Intel Foundry Ser짯vices. We are buil짯ding Intel Foundry Ser짯vices to be a cus짯to짯mer-first tech짯no짯lo짯gy inno짯va짯tor with the broa짯dest ran짯ge of IP, ser짯vices and capa짯ci짯ty. Tower and IFS tog짯e짯ther will pro짯vi짯de a broad port짯fo짯lio of foundry solu짯ti짯ons at glo짯bal sca짯le to enable our cus짯to짯mers ambitions.

Intel is the only lea짯ding-edge play짯er with both rese짯arch and deve짯lo짯p짯ment and manu짯fac짯tu짯ring in the U.S., inclu짯ding recent짯ly announ짯ced capa짯ci짯ty expan짯si짯ons in Ari짯zo짯na and New Mexi짯co, as well as plans to build a new mega-site in Ohio. Tower셲 tech짯no짯lo짯gy and manu짯fac짯tu짯ring foot짯print is high짯ly com짯ple짯men짯ta짯ry to Intel셲 IFS capa짯bi짯li짯ties in lea짯ding-edge pro짯ces짯ses, allo짯wing the com짯bi짯ned com짯pa짯ny to pro짯vi짯de broa짯der offe짯rings to cus짯to짯mers at sca짯le. With the addi짯ti짯on of Tower, Intel is stron짯gly posi짯tio짯ned to bring more value to cus짯to짯mers across the near짯ly $100 bil짯li짯on addressa짯ble foundry market.

Tran짯sac짯tion Details and Timing

The tran짯sac짯tion is expec짯ted to be imme짯dia짯te짯ly accre짯ti짯ve to Intel셲 non-GAAP EPS. Intel intends to fund the acqui짯si짯ti짯on with cash from the balan짯ce sheet.

The tran짯sac짯tion is expec짯ted to clo짯se in appro짯xi짯m짯ate짯ly 12 months. It has been unani짯mously appro짯ved by Intel셲 and Tower셲 boards of direc짯tors and is sub짯ject to cer짯tain regu짯la짯to짯ry appr짯ovals and cus짯to짯ma짯ry clo짯sing con짯di짯ti짯ons, inclu짯ding the appr짯oval of Tower셲 stockholders.

IFS and Tower Semi짯con짯duc짯tor will run inde짯pendent짯ly until deal clo짯sure; IFS will con짯ti짯nue to be led by Tha짯kur, and Tower will con짯ti짯nue to be led by Ell짯wan짯ger during this time. Upon the clo짯se of the tran짯sac짯tion, Intel셲 intent is for the two orga짯niza짯ti짯ons to beco짯me a ful짯ly inte짯gra짯ted foundry busi짯ness. The com짯pa짯ny will share more details on inte짯gra짯ti짯on plans at that time. 

Gold짯man Sachs & Co. LLC ser짯ved as finan짯cial advi짯sor to Intel; and Skad짯den, Arps, Sla짯te, Meag짯her & Flom LLP and Yigal Arnon & Co. ser짯ved as legal advi짯sors. J.P. Mor짯gan Secu짯ri짯ties LLC ser짯ved as finan짯cial advi짯sor to Tower; and Lat짯ham & Wat짯kins, LLP and FISCHER (FBC & Co.) ser짯ved as legal advisors.

Tran짯sac짯tion Dis짯cus짯sion Audiocast

Intel and Tower manage짯ment will host a con짯fe짯rence call for inves짯tors, media and indus짯try ana짯lysts at 5:30 a.m. PST (3:30 p.m. IST) today to dis짯cuss the tran짯sac짯tion and Intel셲 foundry stra짯tegy. Plea짯se visit http://www.directeventreg.com/registration/event/4070988 to regis짯ter for the con짯fe짯rence call. The con짯fe짯rence call can also be acces짯sed in the United Sta짯tes at 1888-8691189 and out짯side the United Sta짯tes at 1706-6435902. A replay will be available on Intel셲 Inves짯tor Rela짯ti짯ons web짯site, INTC.com.  

Tower Semi짯con짯duc짯tor Fourth Quar짯ter and Fis짯cal Year 2021 Ear짯nings Release Update

Tower will issue its fourth-quar짯ter and fis짯cal year 2021 finan짯cials on Feb. 17, 2022. In light of the announ짯ced tran짯sac짯tion, Tower will not pro짯vi짯de gui짯dance for the first-quar짯ter 2022 and will not host an ear짯nings con짯fe짯rence call.

About Tower Semiconductor
Tower Semi짯con짯duc짯tor Ltd. (Nasdaq: TSEM, TASE: TSEM), the lea짯ding foundry of high-value ana짯log semi짯con짯duc짯tor solu짯ti짯ons, pro짯vi짯des tech짯no짯lo짯gy and manu짯fac짯tu짯ring plat짯forms for inte짯gra짯ted cir짯cuits (ICs) in gro짯wing mar짯kets such as con짯su짯mer, indus짯tri짯al, auto짯mo짯ti짯ve, mobi짯le, infra짯struc짯tu짯re, medi짯cal, and aero짯space and defen짯se. Tower Semi짯con짯duc짯tor focu짯ses on crea짯ting posi짯ti짯ve and sus짯tainable impact on the world through long-term part짯ner짯ships and its advan짯ced and inno짯va짯ti짯ve ana짯log tech짯no짯lo짯gy offe짯ring, com짯pri짯sed of a broad ran짯ge of cus짯to짯mizable pro짯cess plat짯forms such as SiGe, BiC짯MOS, mixed-signal/C짯MOS, RF CMOS, CMOS image sen짯sor, non-ima짯ging sen짯sors, inte짯gra짯ted power manage짯ment (BCD and 700V), and MEMS. Tower Semi짯con짯duc짯tor also pro짯vi짯des world-class design ena짯blem짯ent for a quick and accu짯ra짯te design cycle as well as pro짯cess trans짯fer ser짯vices inclu짯ding deve짯lo짯p짯ment, trans짯fer, and opti짯miza짯ti짯on, to IDMs and fab짯less com짯pa짯nies. To pro짯vi짯de mul짯ti-fab sourcing and exten짯ded capa짯ci짯ty for its cus짯to짯mers, Tower Semi짯con짯duc짯tor owns two manu짯fac짯tu짯ring faci짯li짯ties in Isra짯el (150mm and 200mm), two in the U.S. (200mm), three faci짯li짯ties in Japan (two 200mm and one 300mm) which it owns through its 51% hol짯dings in TPS짯Co and is sha짯ring a 300mm manu짯fac짯tu짯ring faci짯li짯ty being estab짯lished in Ita짯ly with ST Microelec짯tro짯nics. For infor짯ma짯ti짯on, plea짯se visit: www.towersemi.com.

 

Forward-Looking Statements

This document contains certain forward-looking statements within the meaning of the 쐓afe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, related to the proposed transaction between Intel and Tower Semiconductor, including statements regarding the benefits and the timing of the transaction as well as statements regarding the companies products and markets. Words such as 쏿nticipate, 쐀elieve, 쐁ould, 쐃stimate, 쐃xpect, 쐄orecast, 쐇ntend, 쐋ikely, 쐌ay, 쐏lan, 쐏otential, 쐏roject, 쐏redict, 쐓eek, 쐓hould, 쐔arget, 쐗ould and 쐗ill and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements are based on management셲 expectations as of the date they were first made and involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the companies businesses and the price of their securities; uncertainties as to the timing of the consummation of the transaction and the potential failure to satisfy the conditions to the consummation of the transaction, including the receipt of certain governmental and regulatory approvals; the potential for regulatory authorities to require divestitures, behavioral remedies or other concessions in order to obtain their approval of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the effect of the announcement or pendency of the transaction on Intel셲 business relationships, operating results, and business generally; delays, disruptions or increased costs in the integration of Tower Semiconductor셲 technology into existing or new products; the potential that Tower Semiconductor shareholders may not approve the transaction; expected benefits, including financial benefits, of the transaction may not be realized; integration of the acquisition post-closing may not occur as anticipated, and the combined companies ability to achieve the growth prospects and synergies expected from the transaction, as well as delays, challenges and expenses associated with integrating the combined companies existing businesses may incur; litigation related to the transaction or otherwise; unanticipated restructuring costs may be incurred or undisclosed liabilities assumed; attempts to retain key personnel and customers may not succeed; risks related to diverting management셲 attention from Intel셲 ongoing business operations; exposure to inflation, currency rate and interest rate fluctuations and risks associated with doing business locally and internationally, as well as fluctuations in the market price of Intel and Tower Semiconductor셲 traded securities; the impact of the COVID-19 pandemic on Intel and Tower Semiconductor셲 business and general economic conditions; demands in Tower Semiconductor셲 customer end markets and for Tower Semiconductor셲 foundry services and/or products that exceed Tower Semiconductor셲 capacity; ongoing or potential litigations or disputes, incidental to the conduct of Tower Semiconductor셲 ongoing business, with customers, suppliers, landlords, or other third parties; the business combination or the combined company셲 products may not be supported by third parties; actions by competitors may negatively impact results; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; potential negative changes in general economic conditions in the regions or the industries in which Intel and Tower Semiconductor operate; potential failure to meet the conditions set in the approval certificates received from the Israeli Investment Center under which Tower Semiconductor received a significant amount of grants in past years; exposure to inflation, currency rates (mainly the Israeli Shekel and Japanese Yen); and other risks detailed in Intel셲 and Tower Semiconductor셲 filings with the Securities and Exchange Commission (the SEC) including those discussed in Intel셲 most recent Annual Report on Form 10멚 and in any subsequent periodic reports on Form 10멡 and Form 8멚 and Tower Semiconductor셲 most recent Annual Report on Form 20멑 and in any subsequent reports on Form 6멚, each of which is on file with or furnished to the SEC and available at the SEC셲 website at www.sec.gov. SEC filings for Intel are also available on Intel셲 Investor Relations website at www.intc.com, and SEC filings for Tower Semiconductor are available in the Investor Relations section of Tower Semiconductor셲 website at ir.towersemi.com. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Unless otherwise required by applicable law, Intel and Tower Semiconductor undertake no obligation and do not intend to update these forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information and Where to Find It

This communication is being made in respect of the proposed transaction. Tower Semiconductor intends to furnish to the SEC and mail or otherwise provide to its shareholders a proxy statement in connection with the proposed transaction with Intel (the 쐏roxy statement), and each party will file or furnish other documents regarding the proposed transaction with the SEC. The proxy statement will be sent or given to the shareholders of Tower Semiconductor and will contain important information about the proposed transaction and related matters. This communication is not a substitute for the proxy statement or any other document that may be filed or furnished by Tower Semiconductor with the SEC. Investors and security holders are urged to read the proxy statement in its entirety and other relevant documents filed with or furnished to the SEC in connection with the proposed transaction or incorporated by reference therein when they become available before making any voting or investment decision with respect to the proposed transaction because they will contain important information about the proposed transaction and the parties to the proposed transaction.

You may obtain copies of all documents filed with or furnished to the SEC regarding this transaction, free of charge, at the SEC셲 website (www.sec.gov). In addition, investors and shareholders will be able to obtain free copies of the proxy statement and other documents filed with or furnished to the SEC by Intel on Intel셲 Investor Relations website (www.intc.com) or by writing to Intel, Investor Relations, 2200 Mission College Blvd., Santa Clara, CA 95054 (for documents filed with the SEC by Intel), or by Tower Semiconductor on Tower Semiconductor셲 Investor Relations website (ir.towersemi.com) or by writing to Tower Semiconductor, Corporate Secretary, 20 Shaul Amor Street, Ramat Gavriel Industrial Park, P.O. Box 619, Migdal Haemek 2310502, Israel (for documents filed with or furnished to the SEC by Tower Semiconductor).