Intel buys Tower Semiconductor for $5.4 billion and enters the image sensor business
Intel has announced that it will acquire camera sensor maker Tower Semiconductor (formerly TourJazz in March 2020) in a deal worth $5.4 billion.
Intel Aggressive Foundry Expansion
Intel will acquire Tower for $53 per share in cash, representing a total value of approximately $5.4 billion. The acquisition significantly advances its strategy as the company further expands its manufacturing capacity, global footprint and technology portfolio.
Intel has aggressively increased manufacturing capabilities as demand for semiconductors continues to rise. The purchase is part of the Intel Foundry Services (IFS) plan it launched in 2021, in which it would establish IFS as a fully vertical, standalone foundry business.
Tower Semiconductor was selected for its specialty in technology manufacturing, radio frequency (RF), power, silicon-germanium (SiGe) and industrial sensors, its extensive IP and Electronic Design Automation (EDA) partnerships, and of course its established foundry footprint. In the official Press release of the transaction, Intel does not mention Tower Semiconductor’s history in image sensors for commercial camera products and it is unclear whether Intel will continue to leverage Tower in this manufacturing capability.
Tower Image Sensor Activity
Tower Semiconductor is one of the few major image sensor manufacturers outside of Sony, Canon and Samsung. That said, it’s never been clear how important the held tower is in consumer cameras as third-party manufacturing is heavily downplayed by camera makers and rarely, if ever, disclosed. .
In 2019, Tower said he thought Sony’s sensor dominance was a problem for camera makers.
“The problem is that Sony is also a camera maker, so they also compete with their customers,” said Dr. Avi Strum, then vice president and general manager of Tower’s Sensors business. “It’s not an easy situation, especially if the market is growing and there’s not enough capacity, so there’s competition on the supply side. If Sony is also a customer of its own facilities, of its own production, it may be giving itself the advantage of getting it first.
For a time, Panasonic held a significant stake in the company, but sold it in December 2019. Over the years, Tower has been regularly linked to sensors in Nikon cameras. In 2020, the Z50 and D7500 sensors were reportedly produced at least in part at Tower thanks to the two cameras appearing in an online conference presentation document for investors and analysts.
With Intel now controlling the manufacturing of Tower and with the few consumer sensors mentioned in the reasons for the acquisition, it’s unclear if Tower will continue to try and challenge Sony in the consumer sensor space. Intel was briefly in the camera business with its RealSense depth-sensing and facial-recognition system, but announced it was abandoning development of the platform in August 2021 to focus on its core chip business. The purchase of Tower seems to be the opposite of this strategy if Intel intends to continue producing image sensors.