Intel went shopping πŸ›’

What happened β€” last night, Intel spent $5.4 billion on acquiring Tower Semiconductor, an Israel-based specialty chip manufacturing company β€” as part of an ongoing mission to fix Intel’s growth problems.

Some context β€” Intel, who historically manufactured and marketed its own semiconductor chips (CPUs, GPUs, Memory, and other stuff) is currently busy turning itself into what they call a contract manufacturer β€” basically making chips for other companies.

Demand for such services comes from fabless players like Nvidia, Qualcomm, Apple, and countless others β€” who don’t have any semiconductor production of their own, and basically just dial up other foundries to outsource their needs. Giants like Taiwan Semiconductor (TSMC) make bank serving this demand.

Anyway, Tower is a small but credible player here β€” whose existing facilities and ~14,000 employees will help accelerate Intel’s plans of contracting. Intel also gets a roster of attractive customers with about $1.3 billion+ in a ready made revenue pipeline.

Worth mentioning β€” COVID messing up global semiconductor manufacturing has caused huge backlog of orders stretching into years. Golden opportunity at Intel’s disposal to stage its comeback.