After failed takeover, Intel and Tower Semi aren't giving up on the relationship

Intel's bid to acquire Israeli foundry operator Tower Semiconductor may have collapsed, but that doesn't mean they can't still set up shop together in the US.

Under an agreement, Intel will provide Tower with access to 300mm wafer production in its New Mexico facility. Tower, meanwhile, will spent $300 million on manufacturing kit to be installed at the Fab 11X site. The companies expect to add more than 600,000 photo layers per month of new capacity.

"This collaboration with Intel allows us to fulfill our customers' demand roadmaps, with a particular focus on advanced power management and radio frequency silicon-on-insulator (SOI) solutions, with full process flow qualification planned in 2024," said Tower CEO Russell Ellwanger.

Specifically, Intel plans to manufacture Tower's 65-nanometer power management bipolar-CMOS-DMOS (BCD) flows and SOI chips at the plant.

While Intel has long chased bleeding-edge silicon to support its datacenter and consumer PC products, Tower specializes in a more diverse and mature array of process tech. Tower's experience operating a foundry business and broad portfolio likely contributed to Intel's $5.4 billion bid to acquire the operator.

That deal fell apart last month after Intel, faced with lengthy delays on account of Chinese regulators, agreed to pay Tower $353 million to terminate the deal. Now it appears that much of that cash will be reinvested in Intel's facilities in the form of equipment.

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The partnership shouldn't come as a surprise. Despite the failed acquisition bid, a collaboration was seen as one of the potential paths forward for Intel Foundry Services (IFS). Gartner analyst Gaurav Gupta highlighted the opportunity in an interview with The Register in August.

"If there is a potential customer who comes to Intel and is using their Intel 16, or Intel 3, or 18A [process nodes], and they also want some other specialty material or legacy nodes, they could bring it over from another foundry — say Tower or someone else — and then Intel can put it together through their chiplets," Gupta said.

The selection of Rio Rancho as the site for Intel's Tower collab would seem to reinforce this idea. In early 2021, not long after Pat Gelsinger ousted former chief executive Bob Swan, Intel invested $3.5 billion to upgrade the facility to produce chips using its Foveros packaging tech.

Foveros allows for compute tiles to be stacked vertically rather than side-by-side, as is the case with Intel's embedded multi-die interconnect bridge (EMIB) tech, which is already under development at the facility. Among the first applications we've seen of Foveros is in Intel's Ponte Vecchio GPU Max series of accelerators.

This isn't the first collaboration IFS has entered into in recent memory. Last month Intel announced it was working with Synopsys to develop new IP products and support multi-die systems built on Intel 3 and 18A process nodes. ®