Intel to Acquire Tower Semiconductor for $5.4B To Expand IFS Capabilities

Continuing their recent spending spree in expanding their foundry capabilities, Intel this morning has announced that it has struck a deal to acquire specialty foundry Tower Semiconductor for $5.4 billion. If approved by shareholders and regulatory au…

Continuing their recent spending spree in expanding their foundry capabilities, Intel this morning has announced that it has struck a deal to acquire specialty foundry Tower Semiconductor for $5.4 billion. If approved by shareholders and regulatory authorities, the deal would result in Intel significantly expanding its own contract foundry capabilities, acquiring not only Tower’s various fabs and specialty production lines, but also the company’s experience in operating contract foundries over the long run.

The proposed deal marks the latest venture from Intel that is designed to bolster Intel Foundry Services’ (IFS) production capabilities. In the last month and a half alone, Intel has announced plans to build a $20B fab complex in Ohio that will, in part, be used to fab chips for IFS, as well as a $1B fund to support companies building new and critical technologies for the overall foundry ecosystem. The Tower Semiconductor acquisition, in turn, is yet another piece of the puzzle for IFS, fleshing out Intel’s foundry capabilities for more exotic products.

As a specialty foundry, the Israel-based Tower Semiconductor is best known for its analog offerings, as well as its other specialized process lines. Among the chip types produced by Tower are MEMS, RF CMOS, BiCMOS, CMOS image sensors, silicon–germanium transistors, and power management chips. Essentially, Tower makes most of the exotic chip types that logic-focused Intel does not – so much so that Intel has been a Tower customer long before today’s deal was announced. All of which is why Intel wants the firm and its capabilities: to boost IFS’s ability to make chips for customers who aren’t after a straight ASIC processor.

The proposed acquisition would also see Intel pick up ownership of/access to the 8 foundry facilities that Tower uses. This includes the Tower-owned 150mm and 200mm fabs in Israel and two 200mm fabs in the US. Meanwhile Tower also has majority ownership in two 200mm fabs and a 300mm fab in Japan, and a future 300mm facility in Italy that will be shared with ST Microelectronics. As is typical for analog and other specialty processes where density is not a critical factor (if not a detriment), all of these fabs are based around mature process nodes, ranging from 1000nm down to 65nm, which sits in stark contrast to Intel’s leading-edge logic fabs.

Along with Tower’s manufacturing technology, the proposed deal would also see Intel pick up Tower’s expertise in the contract foundry business, which is something the historically insular Intel lacks. On top of their fab services, Tower also offers its customers electronic design automation and design services using a range of IP, all of which will be folded into IFS’s expanded offerings as part of the deal. Consequently, although the company has already brought on executives and other personnel with contract fab experience in past hirings, this would be the single largest talent transaction for IFS.

All told, Intel currently expects the deal to take around 12 months to close, with the company paying $5.4 billion in cash from its balance sheet for Tower Semiconductor shares. Though approved by both the Intel and Tower Semiconductor boards, Tower’s stockholders will still need to approve the deal. Intel will also need regulatory approval from multiple governments in order to close the deal, to which the company isn’t expecting much objection to given the complementary nature of the two companies’ foundry offerings. Still, as the last week alone has proven, regulatory approval for multi-billion dollar acquisitions is not always guaranteed.

Intel Changes Senior Executives: VP That Led CES is Out, New CFO

At the close of play today, Intel is announcing two major changes at the top of its organization. The big one is that EVP and GM of Intel’s Client Computing Group, Gregory Bryant, who led the company in their CES messaging only last week, is moving on to new ventures. After his 30-year stint at Intel, he is to be replaced by 25-year veteran Michelle Johnston Holthaus, currently EVP and Intel’s Chief Revenue Officer in charge of Communications, Sales, and Marketing. There’s also a new CFO coming in from Micron.

It’s a big surprise, seeing Gregory Bryant leave Intel. He has been leading the consumer platform team for a number of years, since June 2017, covering the last few generations of CPU and mobile launches through Intel’s tough times with bringing 10nm to revenue. He has overseen the launch of the Intel Evo initiative, and comes from an engineering background, although preferred to let other senior engineers talk to their strengths. Greg will leave Intel at the end of the month, for a new opportunity. It’s actually quite a strange announcement, given that he led Intel’s presentations at CES only last week – a time when he must’ve known that one foot was out the door. Analysts are reporting that his goals involve becoming a CEO somewhere, and that the opportunity he is leaving for is a big one. It also reduces the number of Bryants at senior levels of Intel down from three to one (Diane Bryant left in 2017).

Bryant’s replacement is Intel EVP and Chief Revenue Officer Michelle Johnston Holthaus. She is another Intel lifer, having spent 25 years at the company, joining in 1996. She has held multiple roles in reseller management, HQ central marketing and operations, global account management, and currently sits as GM of the Sales, Marketing, and Communications group. In recent memory Holthaus was the keynote speaker at Intel’s Partner Summit. Bringing her to the role is likely a move to strengthen Intel’s bonds with its OEM partners, an aspect that is seeing increased competition in traditional client OEM markets. It also means that Intel has two women leading its largest business units – Holthaus for Client Computing, and Sandra Rivera for Datacenter.

During the transition, Intel will be searching for a new leader of Intel’s sales, marketing, and communications group.

Also announced today is that Intel is to get a new Chief Financial Officer. It was already announced that current CFO, George Davis, was to retire in 2022 and the search was on for a replacement. That replacement has been found in the form of David Zinsner, who comes from his role as CFO at Micron. This position is effective January 17th, which is shortly before Intel’s end-of-year financial results on January 26th. George Davis is to remain at Intel in an advisory role until May to ensure a seamless transition. It’s key to point out that Intel’s search for a new CFO has been thought to aim to find an individual who has the same CAPEX expenditure aspirations as CEO Pat Gelsinger.

At the close of play today, Intel is announcing two major changes at the top of its organization. The big one is that EVP and GM of Intel’s Client Computing Group, Gregory Bryant, who led the company in their CES messaging only last week, is moving on to new ventures. After his 30-year stint at Intel, he is to be replaced by 25-year veteran Michelle Johnston Holthaus, currently EVP and Intel’s Chief Revenue Officer in charge of Communications, Sales, and Marketing. There’s also a new CFO coming in from Micron.

It’s a big surprise, seeing Gregory Bryant leave Intel. He has been leading the consumer platform team for a number of years, since June 2017, covering the last few generations of CPU and mobile launches through Intel’s tough times with bringing 10nm to revenue. He has overseen the launch of the Intel Evo initiative, and comes from an engineering background, although preferred to let other senior engineers talk to their strengths. Greg will leave Intel at the end of the month, for a new opportunity. It's actually quite a strange announcement, given that he led Intel's presentations at CES only last week - a time when he must've known that one foot was out the door. Analysts are reporting that his goals involve becoming a CEO somewhere, and that the opportunity he is leaving for is a big one. It also reduces the number of Bryants at senior levels of Intel down from three to one (Diane Bryant left in 2017).

Bryant’s replacement is Intel EVP and Chief Revenue Officer Michelle Johnston Holthaus. She is another Intel lifer, having spent 25 years at the company, joining in 1996. She has held multiple roles in reseller management, HQ central marketing and operations, global account management, and currently sits as GM of the Sales, Marketing, and Communications group. In recent memory Holthaus was the keynote speaker at Intel’s Partner Summit. Bringing her to the role is likely a move to strengthen Intel’s bonds with its OEM partners, an aspect that is seeing increased competition in traditional client OEM markets. It also means that Intel has two women leading its largest business units – Holthaus for Client Computing, and Sandra Rivera for Datacenter.

During the transition, Intel will be searching for a new leader of Intel’s sales, marketing, and communications group.

Also announced today is that Intel is to get a new Chief Financial Officer. It was already announced that current CFO, George Davis, was to retire in 2022 and the search was on for a replacement. That replacement has been found in the form of David Zinsner, who comes from his role as CFO at Micron. This position is effective January 17th, which is shortly before Intel’s end-of-year financial results on January 26th. George Davis is to remain at Intel in an advisory role until May to ensure a seamless transition. It’s key to point out that Intel’s search for a new CFO has been thought to aim to find an individual who has the same CAPEX expenditure aspirations as CEO Pat Gelsinger.

Bringing Geek Back: Q&A with Intel CEO Pat Gelsinger

One of the overriding key themes of Pat Gelsinger’s ten-month tenure at Intel has been the eponymous will to ‘bring geek back’ to the company, implying a return to Intel’s competitive past which relied on the expertise of its e…

One of the overriding key themes of Pat Gelsinger’s ten-month tenure at Intel has been the eponymous will to ‘bring geek back’ to the company, implying a return to Intel’s competitive past which relied on the expertise of its engineers to develop market-leading products. During this time, Pat has showcased Intel’s IDM 2.0 strategy, leveraging internal production, external production, and an update to Intel’s foundry offering, making it a cornerstone of Intel’s next decade of growth. The first major launch of this decade happened this week, at Intel’s Innovation event, with the announcement of 12th Gen Core, as well as updates to Intel’s software strategy up and down the company.

After the event, Intel invited several media and an analyst or two onto a group session with CEO Pat, along with CTO Greg Lavender, a recent new CTO hire coming from Pat’s old stomping ground at VMWare. In light of the announcements made at Intel Innovation, as well as the financial quarterly results released just the week prior, and the state of the semiconductor supply globally, everyone had Intel at the forefront of their minds, ready to ask for details on Intel’s plan. 

Intel Executive Posts Thunderbolt 5 Photo then Deletes It: 80 Gbps and PAM-3

An executive visiting various research divisions across the globe isn’t necessarily new, but with a focus on social media driving named individuals at each company to keep their followers sitting on the edge of their seats means that we get a lo…

An executive visiting various research divisions across the globe isn’t necessarily new, but with a focus on social media driving named individuals at each company to keep their followers sitting on the edge of their seats means that we get a lot more insights into how these companies operate. The downside of posting to social media is when certain images exposing unreleased information are not vetted by PR or legal, and we get a glimpse into the next generation of technology. That is what happened today.

Intel’s Process Roadmap to 2025: with 4nm, 3nm, 20A and 18A?!

In today’s Intel Accelerated event, the company is driving a stake into the ground regarding where it wants to be by 2025. CEO Pat Gelsinger earlier this year stated that Intel would be returning to product leadership in 2025, but hasn’t y…

In today’s Intel Accelerated event, the company is driving a stake into the ground regarding where it wants to be by 2025. CEO Pat Gelsinger earlier this year stated that Intel would be returning to product leadership in 2025, but hasn’t yet explained how this is coming about – that is until today, where Intel has disclosed its roadmap for its next five generations of process node technology leading to 2025. Intel believes it can follow an aggressive strategy to match and pass its foundry rivals, while at the same time developing new packaging offerings and starting a foundry business for external customers. On top of all this, Intel has renamed its process nodes.

Intel Continues to Rehire Veterans: At Some Point They’ll Run Out

News on the wire today is that Intel has rehired 28-year veteran Shlomit Weiss into the position of Senior VP and Co-General Manager of Intel’s Design Engineering Group (DEG), a position recently vacated by Uri Frank who left to head up Google&r…

News on the wire today is that Intel has rehired 28-year veteran Shlomit Weiss into the position of Senior VP and Co-General Manager of Intel’s Design Engineering Group (DEG), a position recently vacated by Uri Frank who left to head up Google’s SoC development. As reported in Tom’s Hardware and confirmed in her own LinkedIn announcement, Weiss will be working at Intel’s Israel design center alongside Sunil Shenoy and is ‘committed to ensure that the company continues to lead in developing chips’. Weiss is the latest in an ever growing list of ‘re-hiring’ Intel veterans, which leads to the problem that at some point Intel will run out of ex-employees to rehire and instead nurture internal talent for those roles.

Intel Hires a New Technical Focused Chief Strategy Officer

The title of Chief Strategy Office is an interesting one for Intel. The C-level executive in this position obviously has the goal of managing strategy within the company, although as it pertains to growth more than anything else. Intel has made it cle…

The title of Chief Strategy Office is an interesting one for Intel. The C-level executive in this position obviously has the goal of managing strategy within the company, although as it pertains to growth more than anything else. Intel has made it clear that it wants to grow and expand into markets where it hasn’t traditionally been the dominant player, where there is a lot of addressable market such that Intel believes its products could generate a lot more revenue. Despite having this discussion at its 2019 Investor Meeting, showcasing areas such as 3D NAND, FPGA, Connectivity, Edge, IoT, Automotive and as part of that growth market opportunity, Intel has not had a Chief Strategy Officer to guide it at a high level for over 18 months. Today Intel announced a replacement, Safroadu (Saf) Yeboah-Amankwah.

Yeboah-Amankwah will officially take the position effective November 1st, but has a strong track record of being very technology focused. He holds bachelor’s and master’s degrees in Electrical Engineering and Computer Science from MIT, and has been a Senior Partner and Managing Partner of the Technology, Media, & Telecommunications division of consultants McKinsey and Company, where he has been for 26 years. Recent focal points for Yeboah-Amankwah have included the expansion of technology into Africa, noting a $300 billion potential as Africa’s digital economy expands, as well as supporting technology transformations of telecoms, financial instructions, agricultural operations, as well as mergers and acquisitions. His profile at McKinsey lists his expertise mostly across Finance, Operations, M&A, with a focus on technology.

At Intel, his role at Intel as CSO would appear to include driving growth-oriented strategies in the key areas Intel has already highlighted, most of which align with Yeboah-Amankwah’s previous experience. Alongside this, Intel Capital will also fall under his domain, the arm of Intel that acts as both an investment fund as well as finding companies with acquisition potential. Intel Capital is a large business unit of Intel we don’t often talk about here at Intel (I was rather looking forward to attending the Intel Capital event for a second year, before the lockdown occurred), and will likely have increased importance as Intel attempts to move into these markets with a concerted effort.

Saf Yeboah-Amankwah will report directly to CEO Bob Swan, which means that Swan now has even more direct reportees than ever before.

It is also worth noting that Intel seems to be departing from the general ‘Internal Promotion’ model it has held to since the 80s. The number of recent external hires in key positions (some of which listed below) has the potential to cause some internal friction between employees that have been moving up the chain the past 20 years or so with regards to where Intel’s corporate growth sits. Intel’s recent desire over the past few years to bring in external hires to fill key positions is a story in of its own right.

We were afforded a number of interviews of Intel’s previous CSO over the years. It will be interesting if we are given the same opportunity, to get an insight into Yeboah-Amankwah’s goals for Intel in 2021 and beyond.

Source: Intel

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