Chip giant Intel is near a deal to spend $6 billion to buy contract chip manufacturer Tower Semiconductor for $6 billion, a nearly 60% premium to the value of Tower's shares on Monday, according to a report by The Wall Street Journal's Dana Cimilluca and Car Lombardo, citing multiple unnamed sources.
The report comes as Intel has pledged to spend heavily to catch up in manufacturing after years of stumbles with its own manufacturing efforts, as well as to become a foundry for other chip designers.
29-year-old Tower, based in Migdal Haemek, Israel, makes chips for customers that don't have their own factories, at multiple factories in Israel, Italy and the U.S.
Tower's capabilities focus on older, trailing-edge process technology, parts measuring from 0.8-micron transistor sizes down to 45 nanometer, larger circuits than the cutting edge of 3 nanometers for modern microprocessors.
Tower competes with Taiwan Semiconductor Manufacturing, a foundry that Intel is using for some of its own manufacturing.
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Intel Corp. is close to a deal to buy Israeli chip company Tower Semiconductor Ltd. for nearly $6 billion, according to people familiar with the matter, as the U.S. semiconductor giant continues spending to expand its manufacturing operations.