Intel Corp is buying Israeli chipmaker Tower Semiconductor for $5.4 billion, the companies said on Tuesday, giving it access to more specialized production and making it better positioned to take advantage of soaring demand for semiconductors.
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Intel is paying $53 per share for Tower – which specializes in analogue chips used in cars, medical sensors and power management – well above a closing price of $33.13 on the Nasdaq on Monday.
After a delayed opening, Tower's Tel Aviv-listed shares were 40% higher on Tuesday.
They had surged 48% in after-hours trading on Nasdaq on Monday after news of a possible takeover was reported. Prior to the announcement, Tower had a market value of $3.6 billion. read more
The acquisition will deepen Intel's presence in a sector dominated by Taiwan-based TSMC , the world's largest chipmaker, at a time when the global semiconductor shortage has hampered the production of everything from smartphones to cars.
"Tower's specialty technology portfolio [and] geographic reach ... will help scale Intel's foundry services and advance our goal of becoming a major provider of foundry capacity globally," Intel Chief Executive Pat Gelsinger said in a statement.
