Intel Foundry Services (IFS) and Tower Semiconductor Forge Strategic Alliance

In a significant development for the semiconductor industry, Intel Foundry Services (IFS) and Tower Semiconductor have announced a collaborative agreement aimed at expanding Tower’s global manufacturing capacity.
Intel, Tower Semiconductor logos
The agreement will see Intel providing foundry services and access to its state-of-the-art 300mm manufacturing facility in New Mexico to facilitate Tower Semiconductor’s growth and meet the burgeoning demand for advanced analog processing solutions.

This partnership comes after Intel’s earlier plans to acquire Tower Semiconductor were abandoned due to regulatory obstacles. Under the terms of this new agreement, Tower Semiconductor will invest up to $300 million to acquire and own equipment and assets to be installed at Intel’s New Mexico facility. This investment will create a robust capacity corridor capable of handling over 600,000 photo layers per month, positioning Tower to fulfill the anticipated demand for 300mm advanced analog processing.

Intel  and Tower Semiconductor are committed to expanding their respective foundry footprints to provide cutting-edge solutions and scaled capabilities. As part of this agreement, Intel will manufacture Tower’s highly specialized 65-nanometer power management BCD (bipolar-CMOS-DMOS) flows at its Fab 11X facility in Rio Rancho, New Mexico.

Stuart Pann, Senior Vice President and General Manager of Intel Foundry Services, expressed the company’s long-term vision, saying, “We launched Intel Foundry Services with a long-term view of delivering the world’s first open system foundry that brings together a secure, sustainable, and resilient supply chain with the best of Intel and our ecosystem.”

Russell Ellwanger, CEO of Tower Semiconductor, highlighted the strategic importance of the collaboration, stating, “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 (RF SOI) solutions, with full process flow qualification planned in 2024. We see this as a first step towards multiple unique synergistic solutions with Intel.”

This partnership exemplifies how IFS provides access to manufacturing capacity across Intel’s global factory network, including locations in the U.S., Europe, Israel, and Asia. Intel has a longstanding history of investment and innovation in the Southwest region of the U.S., with sites in Arizona and New Mexico. Previously, Intel announced a $3.5 billion investment to expand its operations in New Mexico, emphasizing the significance of this region in its semiconductor manufacturing strategy.

For Tower Semiconductor, this collaboration represents a pivotal move towards increased scale, allowing them to serve a growing customer base in 300mm technologies, primarily driven by the adoption of their industry-leading 65nm BCD power and RF SOI technologies. Tower’s 65nm BCD technology offers customers enhanced power efficiency, die-size optimization, and cost reduction, making it highly attractive in the market. Additionally, their 65nm RF SOI technology contributes to reduced handset battery consumption and improved wireless connections.

This enhanced scale resulting from the agreement will enable Tower Semiconductor to explore new opportunities with existing technologies while nurturing partnerships with industry-leading customers to develop next-generation technology roadmaps.

Intel Foundry Services is a cornerstone of Intel’s IDM 2.0 strategy, marking a significant step in its multiyear transformation to regain and strengthen its technology leadership, manufacturing scale, and long-term growth. IFS’s remarkable progress in the past year, as evidenced by its more than 300 percent year-over-year revenue increase in the second quarter of 2023, underscores its pivotal role in Intel’s future.

Intel’s recent collaboration with Synopsys to develop intellectual property on Intel 3 and Intel 18A process nodes and its recognition by the U.S. Department of Defense’s Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program further highlight Intel’s commitment to advancing semiconductor technology.

The collaboration between Intel Foundry Services and Tower Semiconductor promises to deliver cutting-edge semiconductor solutions to meet the growing demands of the industry and marks a significant milestone in the semiconductor manufacturing landscape.