Intel has been struggling for a year and a half to agree a deal to buy Israeli contract chipmaker Tower Semiconductor, intending to pledge $5.4 billion at a difficult time for the company. However, this week it became known that it was not possible to obtain all the necessary permits. The Intel boss emphasizes that his company will work with Tower Semiconductor without looking back on the failed deal.
“Our respect to Tower has only grown stronger throughout the process (preparing the deal) and we will continue to explore opportunities for future collaboration.” — explained CEO Patrick Gelsinger. Keep in mind that Intel will be forced to pay $353 million in compensation for its refusal to buy Tower Semiconductor’s assets. Gelsinger added that contract manufacturing initiatives are important to fully deploy the IDM 2.0 business model and that the company will move forward in all areas of its strategy. Intel is on track to regain its leadership in transistor speed and power efficiency by 2025 by attracting customers and expanding the ecosystem, investing in geographical manufacturing diversification, and creating a sustainable manufacturing base that the whole world needs, like Intel’s leader explained the company.
Stuart Pann, head of Intel Contracting, added that the company’s core business has attracted many partners and customers since 2021 and has made significant progress toward the goal of making the company the second-largest contract chipmaker in the world by the end of this decade. According to Stuart Penn, Intel builds “the world’s first open contract manufacturing ecosystem” with competencies in the fields of packaging, chiplets and software. All of this goes well beyond traditional silicon wafer processing, according to an Intel spokesman. In the most recent quarter, the company’s contracts division quadrupled revenue to $232 million, but it still suffers $143 million in operating losses, and the “compensation” from the failed deal with Tower Semiconductor will only make the situation worse, it says about the complete financial well-being of Intel is indeed premature.