10 ms·

Intel to Acquire Tower Semiconductor for $5.4B

150 points by frxx 5y ago

comboy 5y ago
For anyone interested in the topic of semiconductors industry this channel provides some great info and explanations: https://www.youtube.com/watch?v=GbkFAO1oUu8 https://www.youtube.com/watch?v=GbkFAO1oUu8
- recuter 5y ago
  Also recommend https://www.youtube.com/watch?v=3lEgJQgAw3g https://www.youtube.com/watch?v=3lEgJQgAw3g
  - ckozlowski 5y ago
    I was coming here to post this actually, as they had a little snippet at the end about Tower as well. Great channel.
spupe 5y ago
Intel has a clear strategy of becoming a big player in the semiconductor industry in the next decade. I honestly think it will work. Many people have observed that it is a cash-intensive industry with tiny margins, but once these huge investments have been made and there are only two or three companies that can dominate the market for five to ten years, you can extract huge value before any competitor catches up.
- the-dude 5y ago
  This comment could have been written 50 years ago.
  - yvdriess 5y ago
    Compare the number of players with leading edge fabs then and now though.
    - kken 5y ago
      There were no players without fabs back then.
    - cogman10 5y ago
      Yup, the major change has been the capital to get new fabs off the ground has become unimaginable. TSMC is practically the only game in town for chip manufactures ATM, everyone else that will fab 3rd party designs is way behind. GlobalFoundries state of the art, for example, is a 12nm process. TSMC sits at 5nm, about 4 generations ahead.
      - duped 5y ago
        There are trillions of dollars in capital floating around looking for a better place to park it than treasuries. Major infrastructural projects like semi fabs should be a no brainer - the risk is not that high due to evergrowing demand and the trust that governments won't let an Intel or TSMC fail. Even just look at the VC landscape - there was $621 billion spent in venture capital globally last year, which is one of the worst ways to invest your cash. Point being there's plenty of capital out there for giant projects like building fabs, I just don't think it's sexy enough yet or the financiers haven't taken a deep enough look while governments are expected to make the first moves.
      - vondro 5y ago
        Samsung is not that much behind, recent nVidia GPUs and Qualcomm CPUs are manufactured by Samsung (8N and 4nm, whatever those mean anyway). While density and perf/watt is worse than TSMC, it's THE competitor for TSMC.
  - smoldesu 5y ago
    And they still would have been right?
- mhh__ 5y ago
  > becoming a big player Are you saying they aren't a big player now?
  - m_mueller 5y ago
    Gartner puts them at Nr. 2 in 2021 after Samsung Electronics. However it should be noted that for Intel this seems to include total Revenue while for others it seems to be just their pure semiconductor revenue. If Intel were to sell their chip manufacturing as a subsidiary to themselves at market price, that subsidiary probably would be way further down the list.
  - throwaway4good 5y ago
    Wouldn't this require them to start making SOCs for mobile phones?
    - throwaway4good 5y ago
      In other words producing for chip designers such as Apple, Qualcomm, or Samsung.
      - ChrisMarshallNY 5y ago
        US-based TSMC. They have a good chance of succeeding. They are likely to get a lot of government help. They’ll probably start with older systems, as there’s already a huge need for these, and they have a gazillion existing fabs. It won’t compete with their current lines, and means they don’t need to mothball their legacy fabs.
        unfocussed_mike 5y ago
        > They are likely to get a lot of government help. Indeed -- the not so subtle subtext of their pitch is "China, eh? Have fun with that.". So a pitch based on the idea that it's strategically important to bring that chip manufacturing "home". Which is why they picked Israel. /s
- kken 5y ago
  >f becoming a big player in the semiconductor industry in the next decade Did you mean "a big player in the semiconductor _foundry_ industry in the next decade" ? Intel has been the biggest semi player for most years during the last three decades.
- mmmBacon 5y ago
  Where do you get that the profit margins are tiny? TSMC has a net profit margin of 38%; that’s higher than Google (27%).
- Shadonototra 5y ago
  They don't have a strategy, they react to their downfall and are rushing to find a solution They are lucky the pandemic happened, it gave them the opportunity to take a step back and realize how screwed they are
deleted 5y ago
[deleted]
lnsru 5y ago
When reading headline I was thinking about Intel removing its competitor. Then I searched a bit and found this: “ Tower Semiconductor Ltd. is an Israeli company that manufactures integrated circuits using specialty process technologies, including SiGe, BiCMOS, SOI, mixed-signal and RFCMOS, CMOS image sensors, non-imaging sensors, power management, and non-volatile memory as well as MEMS capabilities.” Looks like that Intel wants to go deeper in foundry business offering more services. I can speculate, that Intel has very good silicon process for logic circuits and will improve their offerings with technology from this acquisition. Sounds like a reasonable strategy to me.
- throwaway4good 5y ago
  So it is some kind of complement to Intel's business? By the price Intel is paying compared to Tower's revenue, it really sounds like Intel is paying a lot without being able to add anything?!
  - otherotherchris 5y ago
    It's somewhat complementary to their Israeli fab business. They may also think having a multibillion dollar fab investment next to the Golan Heights is safer than having one next to the Gaza strip. ¯\_(ツ)_/¯
    - throwaway4good 5y ago
      Yeah, yeah. A bit to chat about when Pat Gelsinger roams about thrashing TSMC for having their fabs at an insecure location.
      - nisegami 5y ago
        Kinda spooky how much of the cutting edge semiconductor fabs are in disputed territories...
        syshum 5y ago
graderjs 5y ago
Scooped you by 21 hours: https://news.ycombinator.com/item?id=30344944 https://news.ycombinator.com/item?id=30344944 I think this comment will be downvoted, but just want to run the experiment to be sure. I'll delete if so .. No worries.
- ant6n 5y ago
  You'll be downvoted for talking about downvoting (just as I will be). Just avoid.
  - graderjs 5y ago
    No I think it's helpful in these cases where I'm just trying to learn about the community. Heh, we probably ought to avoid continuing to talk about and make a thread about it here :) But maybe there's some useful distinctions to be made. I think the times where's it's bad is if I go, "Don't downvote..." or "Downvotes are idiots" or whatever...Here I'm just honestly being like, I think this will be a "low value" comment and I'm happy to remove it, but I'm not entirely sure so I want to check. I think that's useful to make it clear and transparent. Actually I'm surprised it got upvoted. I thought people would take issue with me saying "I was there first"...but anyway, I learned something. Yay :)
    - ginko 5y ago
      I downvoted you because I do think your comment does add little to the discussion other than "I posted it first!", which isn't all that interesting all things considered. It just seems bitter.
      - graderjs 5y ago
        That's what I thought people would feel, and why I said I thought it would be downvoted. But thanks for letting me that's what you think anyway! I don't like to admit it because of how silly and weak I think it looks, but, yep I did feel it was unfair and I was showing a little bitterness there--correctly identified, ginko!--I felt sad about it, like "why no upvotes for me?"--but also posted it with a goodnatured thing too, like "I scooped you! But you got the votes!" which can always be a dynamic with news scoops. It was both, you know. And I don't really think it's unfair, because it's basically random how a post gets up. Plus, Haaretz has a paywall, maybe that contributes too...But you always wonder, you know...heh :) Thanks for adding to my shame there, ginko :<... edit: Oh, I see you got downvoted. Poor you. That's very meta. edit 2: Ooh, I see the original post has been flagged. I definitely think we should stop talking about it now, heh! OMG let's stop please! :)
gigatexal 5y ago
Is this Intel’s PASemi moment or something entirely different? Remember PASemi were the folks Apple bought that gave us the A series chips and made Apple the chip powerhouse it is today.
- sanxiyn 5y ago
  I think it's entirely different. Tower is a specialty foundry.
chrisjc 5y ago
> manufactures integrated circuits using specialty process technologies, including SiGe, BiCMOS, SOI, mixed-signal and RFCMOS, CMOS image sensors, non-imaging sensors, power management, and non-volatile memory Aren't these the kinds of technologies used to produce the kinds of chips that are in great shortage atm? Or perhaps a better way of stating what I'm trying to say is... aren't these the kinds of technologies that could be used to produce chips that can replace those that are in great shortage atm? Not as dependent on highly advanced lithography machinery from the likes of ASML, but not so ancient as those that have recently stopped churning out the same basic chips after 20-30 years.
- mastax 5y ago
  Yes. On the investor call one of the points was that Intel's cash would allow tower to expand and modernize its old 150mm and 200mm fabs, and to expand PMIC production enough to be competitive in that market.
nickpeterson 5y ago
Intel will succeed as long as it isn’t grossly mismanaged simply because the US government needs them to succeed. I’m also surprised they don’t pressure Apple to start building fabs in the US as well considering they own the entire stack now.
- jcranmer 5y ago
  Apple doesn't fab chips itself; those come from TSMC… who are building fabs in the US now.
  - nickpeterson 5y ago
    I kind of expect Apple to start fabbing chips eventually.
- Hamuko 5y ago
  I'd foresee Apple ordering chips from Intel Foundry Services' new US fabs before Apple actually building their own fabs. Although AFAIK, IFS fabs do not yet compete in the same nodes as TSMC.
  - deleted 5y ago
    [deleted]

150 points by frxx 5y ago

For anyone interested in the topic of semiconductors industry this channel provides some great info and explanations: https://www.youtube.com/watch?v=GbkFAO1oUu8 https://www.youtube.com/watch?v=GbkFAO1oUu8

recuter 5y ago
Also recommend https://www.youtube.com/watch?v=3lEgJQgAw3g https://www.youtube.com/watch?v=3lEgJQgAw3g
- ckozlowski 5y ago
  I was coming here to post this actually, as they had a little snippet at the end about Tower as well. Great channel.

spupe 5y ago

Intel has a clear strategy of becoming a big player in the semiconductor industry in the next decade. I honestly think it will work. Many people have observed that it is a cash-intensive industry with tiny margins, but once these huge investments have been made and there are only two or three companies that can dominate the market for five to ten years, you can extract huge value before any competitor catches up.

the-dude 5y ago
This comment could have been written 50 years ago.
- yvdriess 5y ago
  Compare the number of players with leading edge fabs then and now though.
  - kken 5y ago
    There were no players without fabs back then.
  - cogman10 5y ago
    Yup, the major change has been the capital to get new fabs off the ground has become unimaginable. TSMC is practically the only game in town for chip manufactures ATM, everyone else that will fab 3rd party designs is way behind. GlobalFoundries state of the art, for example, is a 12nm process. TSMC sits at 5nm, about 4 generations ahead.
    - duped 5y ago
      There are trillions of dollars in capital floating around looking for a better place to park it than treasuries. Major infrastructural projects like semi fabs should be a no brainer - the risk is not that high due to evergrowing demand and the trust that governments won't let an Intel or TSMC fail. Even just look at the VC landscape - there was $621 billion spent in venture capital globally last year, which is one of the worst ways to invest your cash. Point being there's plenty of capital out there for giant projects like building fabs, I just don't think it's sexy enough yet or the financiers haven't taken a deep enough look while governments are expected to make the first moves.
    - vondro 5y ago
      Samsung is not that much behind, recent nVidia GPUs and Qualcomm CPUs are manufactured by Samsung (8N and 4nm, whatever those mean anyway). While density and perf/watt is worse than TSMC, it's THE competitor for TSMC.
- smoldesu 5y ago
  And they still would have been right?
mhh__ 5y ago
> becoming a big player Are you saying they aren't a big player now?
- m_mueller 5y ago
  Gartner puts them at Nr. 2 in 2021 after Samsung Electronics. However it should be noted that for Intel this seems to include total Revenue while for others it seems to be just their pure semiconductor revenue. If Intel were to sell their chip manufacturing as a subsidiary to themselves at market price, that subsidiary probably would be way further down the list.
- throwaway4good 5y ago
  Wouldn't this require them to start making SOCs for mobile phones?
  - throwaway4good 5y ago
    In other words producing for chip designers such as Apple, Qualcomm, or Samsung.
    - ChrisMarshallNY 5y ago
      US-based TSMC. They have a good chance of succeeding. They are likely to get a lot of government help. They’ll probably start with older systems, as there’s already a huge need for these, and they have a gazillion existing fabs. It won’t compete with their current lines, and means they don’t need to mothball their legacy fabs.
      - unfocussed_mike 5y ago
        > They are likely to get a lot of government help. Indeed -- the not so subtle subtext of their pitch is "China, eh? Have fun with that.". So a pitch based on the idea that it's strategically important to bring that chip manufacturing "home". Which is why they picked Israel. /s
kken 5y ago
>f becoming a big player in the semiconductor industry in the next decade Did you mean "a big player in the semiconductor _foundry_ industry in the next decade" ? Intel has been the biggest semi player for most years during the last three decades.
mmmBacon 5y ago
Where do you get that the profit margins are tiny? TSMC has a net profit margin of 38%; that’s higher than Google (27%).
Shadonototra 5y ago
They don't have a strategy, they react to their downfall and are rushing to find a solution They are lucky the pandemic happened, it gave them the opportunity to take a step back and realize how screwed they are

deleted 5y ago

[deleted]

lnsru 5y ago

When reading headline I was thinking about Intel removing its competitor. Then I searched a bit and found this: “ Tower Semiconductor Ltd. is an Israeli company that manufactures integrated circuits using specialty process technologies, including SiGe, BiCMOS, SOI, mixed-signal and RFCMOS, CMOS image sensors, non-imaging sensors, power management, and non-volatile memory as well as MEMS capabilities.” Looks like that Intel wants to go deeper in foundry business offering more services. I can speculate, that Intel has very good silicon process for logic circuits and will improve their offerings with technology from this acquisition. Sounds like a reasonable strategy to me.

throwaway4good 5y ago
So it is some kind of complement to Intel's business? By the price Intel is paying compared to Tower's revenue, it really sounds like Intel is paying a lot without being able to add anything?!
- otherotherchris 5y ago
  It's somewhat complementary to their Israeli fab business. They may also think having a multibillion dollar fab investment next to the Golan Heights is safer than having one next to the Gaza strip. ¯\_(ツ)_/¯
  - throwaway4good 5y ago
    Yeah, yeah. A bit to chat about when Pat Gelsinger roams about thrashing TSMC for having their fabs at an insecure location.
    - nisegami 5y ago
      Kinda spooky how much of the cutting edge semiconductor fabs are in disputed territories...
      - syshum 5y ago

graderjs 5y ago

Scooped you by 21 hours: https://news.ycombinator.com/item?id=30344944 https://news.ycombinator.com/item?id=30344944 I think this comment will be downvoted, but just want to run the experiment to be sure. I'll delete if so .. No worries.

ant6n 5y ago
You'll be downvoted for talking about downvoting (just as I will be). Just avoid.
- graderjs 5y ago
  No I think it's helpful in these cases where I'm just trying to learn about the community. Heh, we probably ought to avoid continuing to talk about and make a thread about it here :) But maybe there's some useful distinctions to be made. I think the times where's it's bad is if I go, "Don't downvote..." or "Downvotes are idiots" or whatever...Here I'm just honestly being like, I think this will be a "low value" comment and I'm happy to remove it, but I'm not entirely sure so I want to check. I think that's useful to make it clear and transparent. Actually I'm surprised it got upvoted. I thought people would take issue with me saying "I was there first"...but anyway, I learned something. Yay :)
  - ginko 5y ago
    I downvoted you because I do think your comment does add little to the discussion other than "I posted it first!", which isn't all that interesting all things considered. It just seems bitter.
    - graderjs 5y ago
      That's what I thought people would feel, and why I said I thought it would be downvoted. But thanks for letting me that's what you think anyway! I don't like to admit it because of how silly and weak I think it looks, but, yep I did feel it was unfair and I was showing a little bitterness there--correctly identified, ginko!--I felt sad about it, like "why no upvotes for me?"--but also posted it with a goodnatured thing too, like "I scooped you! But you got the votes!" which can always be a dynamic with news scoops. It was both, you know. And I don't really think it's unfair, because it's basically random how a post gets up. Plus, Haaretz has a paywall, maybe that contributes too...But you always wonder, you know...heh :) Thanks for adding to my shame there, ginko :<... edit: Oh, I see you got downvoted. Poor you. That's very meta. edit 2: Ooh, I see the original post has been flagged. I definitely think we should stop talking about it now, heh! OMG let's stop please! :)

gigatexal 5y ago

Is this Intel’s PASemi moment or something entirely different? Remember PASemi were the folks Apple bought that gave us the A series chips and made Apple the chip powerhouse it is today.

sanxiyn 5y ago
I think it's entirely different. Tower is a specialty foundry.

chrisjc 5y ago

> manufactures integrated circuits using specialty process technologies, including SiGe, BiCMOS, SOI, mixed-signal and RFCMOS, CMOS image sensors, non-imaging sensors, power management, and non-volatile memory Aren't these the kinds of technologies used to produce the kinds of chips that are in great shortage atm? Or perhaps a better way of stating what I'm trying to say is... aren't these the kinds of technologies that could be used to produce chips that can replace those that are in great shortage atm? Not as dependent on highly advanced lithography machinery from the likes of ASML, but not so ancient as those that have recently stopped churning out the same basic chips after 20-30 years.

mastax 5y ago
Yes. On the investor call one of the points was that Intel's cash would allow tower to expand and modernize its old 150mm and 200mm fabs, and to expand PMIC production enough to be competitive in that market.

nickpeterson 5y ago

Intel will succeed as long as it isn’t grossly mismanaged simply because the US government needs them to succeed. I’m also surprised they don’t pressure Apple to start building fabs in the US as well considering they own the entire stack now.

jcranmer 5y ago
Apple doesn't fab chips itself; those come from TSMC… who are building fabs in the US now.
- nickpeterson 5y ago
  I kind of expect Apple to start fabbing chips eventually.
Hamuko 5y ago
I'd foresee Apple ordering chips from Intel Foundry Services' new US fabs before Apple actually building their own fabs. Although AFAIK, IFS fabs do not yet compete in the same nodes as TSMC.
- deleted 5y ago
  [deleted]