[HN Gopher] Intel to Acquire Tower Semiconductor for $5.4B
___________________________________________________________________
Intel to Acquire Tower Semiconductor for $5.4B
Author : frxx
Score : 141 points
Date : 2022-02-16 07:49 UTC (15 hours ago)
(HTM) web link (www.intc.com)
(TXT) w3m dump (www.intc.com)
| lnsru wrote:
| When reading headline I was thinking about Intel removing its
| competitor. Then I searched a bit and found this: " Tower
| Semiconductor Ltd. is an Israeli company that manufactures
| integrated circuits using specialty process technologies,
| including SiGe, BiCMOS, SOI, mixed-signal and RFCMOS, CMOS image
| sensors, non-imaging sensors, power management, and non-volatile
| memory as well as MEMS capabilities."
|
| Looks like that Intel wants to go deeper in foundry business
| offering more services. I can speculate, that Intel has very good
| silicon process for logic circuits and will improve their
| offerings with technology from this acquisition. Sounds like a
| reasonable strategy to me.
| throwaway4good wrote:
| So it is some kind of complement to Intel's business? By the
| price Intel is paying compared to Tower's revenue, it really
| sounds like Intel is paying a lot without being able to add
| anything?!
| adventured wrote:
| > By the price Intel is paying compared to Tower's revenue
|
| ~3.5x sales is not a lot, especially not in this market
| (either broadly or semis specifically).
|
| AMD is at 9x sales; Nvidia is 27x; Analog Devices is 11x;
| Texas Instruments is 8x; Applied Materials is 5x; Micron is
| 3.6x; Taiwan Semi is ~11x; ASML is ~13x; KLA is 7x; LAM is 5x
| - and so on.
| formercoder wrote:
| These companies also don't all have the same margins, so
| benchmarking on a sales multiple doesn't give a good feel
| for valuation. Everyone does it anyway though, so in that
| sense it works.
| unfocussed_mike wrote:
| AMD isn't a comparable business for this list, because it
| no longer has fab facilities. That was spun off to
| GlobalFoundries.
| otherotherchris wrote:
| It's somewhat complementary to their Israeli fab business.
|
| They may also think having a multibillion dollar fab
| investment next to the Golan Heights is safer than having one
| next to the Gaza strip. -\\_(tsu)_/-
| Fatnino wrote:
| Just how big do you think Israel is that you expect there
| to be a location not "near" Hamas or Hezbollah controlled
| territory?
| HideousKojima wrote:
| "Near" and "Near but not within rocket/artillery range"
| are significant differences though.
| Fatnino wrote:
| https://en.m.wikipedia.org/wiki/Palestinian_rocket_attack
| s_o...
| selectodude wrote:
| There's a lot more water in the Golan Heights, which is
| really why Israel decided to take it over in the first
| place.
| daniel-cussen wrote:
| Water is crucially important to fabs, true. But get real,
| water is important for everything in Israel, and why it
| had strategic value to warrant annexing it after the
| whole--the whole war that happened, the casus bellum of
| which cannot be done justice in short comments like this.
| throwaway894345 wrote:
| The parent said Israel took over Golan Heights for its
| water, not "...for its water _for fabs_ ".
| sharikous wrote:
| Israel is so small that according to your definition of
| "next" everything has to be "next" to the Gaza Strip, the
| Golan Heights and the West Bank, and also to Lebanon, Syria
| Egypt and Jordan for good measure.
|
| Seriously, Tower is far away from the Golan Heights in the
| Israeli sense. It is however in the Galilee (big Arab
| population) and "near" the West Bank.
|
| I think the closeness to the Technion university and to
| Intel's partners factories (KLA Temcor...) is a much more
| significant factoid
| throwaway4good wrote:
| Yeah, yeah. A bit to chat about when Pat Gelsinger roams
| about thrashing TSMC for having their fabs at an insecure
| location.
| nisegami wrote:
| Kinda spooky how much of the cutting edge semiconductor
| fabs are in disputed territories...
| syshum wrote:
| they are purposely built their for Geo-political reasons,
| to ensure those area's stay "disputed"
| throwaway4good wrote:
| The "geopolitics" is played up as the US now needs an
| excuse for aggressive industrial policies aiming to move
| jobs from "allieds" such as South Korea and Taiwan and
| back into the US.
|
| Pat Gelsinger panders to this as he eyes a windfall for
| his business, so much that it is getting harsh reactions
| from Taiwan:
|
| Intel CEO: Taiwan Isn't a Stable Place. TSMC Founder Has
| Other Concerns
|
| https://techtaiwan.com/20211207/gelsinger-intel-taiwan/
| xadhominemx wrote:
| Completely absurd comment. Israel is a minnow in the
| semiconductor manufacturing industry and many fabs are
| located in Taiwan because Taiwanese people invented the
| foundry business.
| Aromasin wrote:
| I disagree. Israel is unique in terms of it's human
| capital. Tech companies have locations there for the same
| reasons they have locations in Oxford and Cambridge in
| the UK. There are 135 per 10,000 people employed as
| engineers there, compared to the next closest which is
| the US at 70 per 10k. That would already be a unique draw
| for Intel, if it weren't for the original reason they set
| up shop there; Dov Frohman. He was the first GM at Intel
| (also the inventor of EPROM), and wanted to relocate
| there to accept a Professorship. They didn't want to lose
| him, so they agreed to let him open an R&D lab there.
| This ended up being a huge success (they designed the
| 8087 there) and they continued to grow on that success,
| to the point where Intel is now the largest private
| employer in Israel.
|
| I recommend Asianometry's video essay on Intel's success
| in Israel:
| https://www.youtube.com/watch?v=3lEgJQgAw3g&t=894s
|
| He also covers the rise of such silicon manufacturing in
| Taiwan - which I also disagree on it being geo-
| politically motivated, with it being successful long
| before it's national identity came under threat from
| mainland China.
| throwaway4good wrote:
| I think the issue of "how to reunite the rogue republic
| of Taiwan with the motherland" predates silicon
| manufactoring in Taiwan by a few years :-D
| emteycz wrote:
| Or the disputed places make unusual investments due to
| their status?
| shashashasha___ wrote:
| that area is not considered disputed at all. there is a
| difference between insecure and disputed or maybe I'm
| getting it wrong?
| [deleted]
| MangoCoffee wrote:
| Intel is paying for a foot into the foundry business door.
|
| https://ir.towerjazz.com/static-
| files/fc758c75-c7fd-4f87-9d1...
|
| looking at the latest report. Tower is like TSMC for
| specialty chip. i think this will be great if Intel want to
| go all in on IDM 2.0
| mmmBacon wrote:
| These technologies are key to certain high speed
| applications. As we move from monolithic devices to MCMs with
| lots of high-speed IO these technologies will be important.
| graderjs wrote:
| Scooped you by 21 hours:
| https://news.ycombinator.com/item?id=30344944
|
| I think this comment will be downvoted, but just want to run the
| experiment to be sure. I'll delete if so .. No worries.
| ant6n wrote:
| You'll be downvoted for talking about downvoting (just as I
| will be). Just avoid.
| graderjs wrote:
| No I think it's helpful in these cases where I'm just trying
| to learn about the community.
|
| Heh, we probably ought to avoid _continuing_ to talk about
| and make a thread about it here :)
|
| But maybe there's some useful distinctions to be made. I
| think the times where's it's bad is if I go, "Don't
| downvote..." or "Downvotes are idiots" or whatever...Here I'm
| just honestly being like, I think this will be a "low value"
| comment and I'm happy to remove it, but I'm not entirely sure
| so I want to check. I think that's useful to make it clear
| and transparent.
|
| Actually I'm surprised it got upvoted. I thought people would
| take issue with me saying "I was there first"...but anyway, I
| learned something. Yay :)
| ginko wrote:
| I downvoted you because I do think your comment does add
| little to the discussion other than "I posted it first!",
| which isn't all that interesting all things considered. It
| just seems bitter.
| graderjs wrote:
| That's what I thought people would feel, and why I said I
| thought it would be downvoted. But thanks for letting me
| that's what you think anyway!
|
| I don't like to admit it because of how silly and weak I
| think it looks, but, yep I did feel it was unfair and I
| was showing a little bitterness there--correctly
| identified, ginko!--I felt sad about it, like "why no
| upvotes for me?"--but also posted it with a goodnatured
| thing too, like "I scooped you! But you got the votes!"
| which can always be a dynamic with news scoops. It was
| both, you know. And I don't really _think_ it 's unfair,
| because it's basically random how a post gets up. Plus,
| Haaretz has a paywall, maybe that contributes too...But
| you always wonder, you know...heh :) Thanks for adding to
| my shame there, ginko :<...
|
| edit: Oh, I see you got downvoted. Poor you. That's very
| meta.
|
| edit 2: Ooh, I see the original post has been flagged. I
| definitely think we should stop talking about it now,
| heh! OMG let's stop please! :)
| smoldesu wrote:
| You're not exactly Babe Ruth calling the shot on this
| one. If you post something that isn't intellectually
| gratifying and purely petty, then yes, you're going to be
| downvoted on Hacker News.
|
| If you posted something along the lines of "Here's the
| version that isn't paywalled" or "this article has a more
| interesting analysis", people wouldn't have dogpiled you.
| Instead, you buried the lede and mentioned some pseudo-
| experiment, which isn't going to get a lot of traction
| around here. If you want to endlessly fight with people
| over attribution credits and updoot points, you'd
| probably get a real kick out of Reddit.
| [deleted]
| graderjs wrote:
| Interesting...
|
| "Babe Ruth's called shot."
|
| Heh, no not in this case :). I thought it was going to
| get downvoted quickly, but it didn't. _edit:_ I see that
| finally it has hit 0, after many hours. So, I guess I
| _was_ , _similar to_ , Babe Ruth calling the shot, here.
| Heh :)
|
| It was a real experiment, not pseudo.
|
| Agree about the intellectually gratifying, and your
| alternative suggestions are good. I was considering
| something like that too (thought I posted in a reply, but
| I edited it out).
|
| It wasn't purely petty, as I said, sportsmanlike. Is
| feeling something unfair, or feeling sad about something,
| petty? I don't think so, I think it's just normal...but
| like I said, I feel it's embarrassing to admit in this
| case, because it seems silly to me. But I guess...well I
| do care about it, so I guess it can't be that silly.
|
| It wasn't fighting...not at all.
|
| And I don't think people 'dogpiled' -- just sharing their
| perspective and/or trying to teach me something. And I
| learned something. So that's good. 'Dogpiled' is
| interesting, haven't heard that term before...
|
| Wouldn't say I buried the lede, because there were only 3
| parts to the post: link, scoop and experiment, and enough
| people saw it to get it many more upvotes...
|
| Heh, you do seem to find a lot to disagree about,
| misrepresent, or take issue and criticize there (not sure
| exactly how to describe what you do above)...could it
| maybe be you who was looking to fight? I honestly don't
| feel like that, so please let's not continue. Peace,
| please? I would love that :)
| [deleted]
| MichaelApproved wrote:
| Since you're conducting an experiment, I'll provide my
| feedback. Usually I'd downvote a simple comment talking about
| being first to post but you also provided a link to the
| previous discussion which I thought was worth upvoting.
|
| Regarding the talk of downvotes, I'd usually downvote for all
| the classic reasons but you turned it into an experiment which
| will spark discussion, so that's an extra reason to upvote.
|
| I take my upvote/downvote powers very seriously. Or maybe a bit
| too seriously?
|
| Edit: after making this comment I clicked and saw your post got
| no comments, so I must now consider it to be a "simple" comment
| with little value.
|
| Hmmmm. I guess I'll just take back my upvote but refrain from
| downvoting.
| graderjs wrote:
| Hehe, thank you for the comprehensive thinking portrayal. I
| really like that. I also take the down/upvotes thing
| seriously. And when I first got the power really didn't want
| to use it to down people even if they were really mean or I
| really disagreed. I try to upvote people who add information
| or a good feeling, but I still rarely downvote. At first I
| rarely upvoted as well...but now a lot more.
| chrisjc wrote:
| > manufactures integrated circuits using specialty process
| technologies, including SiGe, BiCMOS, SOI, mixed-signal and
| RFCMOS, CMOS image sensors, non-imaging sensors, power
| management, and non-volatile memory
|
| Aren't these the kinds of technologies used to produce the kinds
| of chips that are in great shortage atm?
|
| Or perhaps a better way of stating what I'm trying to say is...
| aren't these the kinds of technologies that could be used to
| produce chips that can replace those that are in great shortage
| atm?
|
| Not as dependent on highly advanced lithography machinery from
| the likes of ASML, but not so ancient as those that have recently
| stopped churning out the same basic chips after 20-30 years.
| mastax wrote:
| Yes. On the investor call one of the points was that Intel's
| cash would allow tower to expand and modernize its old 150mm
| and 200mm fabs, and to expand PMIC production enough to be
| competitive in that market.
| comboy wrote:
| For anyone interested in the topic of semiconductors industry
| this channel provides some great info and explanations:
| https://www.youtube.com/watch?v=GbkFAO1oUu8
| recuter wrote:
| Also recommend https://www.youtube.com/watch?v=3lEgJQgAw3g
| ckozlowski wrote:
| I was coming here to post this actually, as they had a little
| snippet at the end about Tower as well. Great channel.
| [deleted]
| nickpeterson wrote:
| Intel will succeed as long as it isn't grossly mismanaged simply
| because the US government needs them to succeed. I'm also
| surprised they don't pressure Apple to start building fabs in the
| US as well considering they own the entire stack now.
| jcranmer wrote:
| Apple doesn't fab chips itself; those come from TSMC... who are
| building fabs in the US now.
| nickpeterson wrote:
| I kind of expect Apple to start fabbing chips eventually.
| Hamuko wrote:
| I'd foresee Apple ordering chips from Intel Foundry Services'
| new US fabs before Apple actually building their own fabs.
| Although AFAIK, IFS fabs do not yet compete in the same nodes
| as TSMC.
| [deleted]
| spupe wrote:
| Intel has a clear strategy of becoming a big player in the
| semiconductor industry in the next decade. I honestly think it
| will work. Many people have observed that it is a cash-intensive
| industry with tiny margins, but once these huge investments have
| been made and there are only two or three companies that can
| dominate the market for five to ten years, you can extract huge
| value before any competitor catches up.
| the-dude wrote:
| This comment could have been written 50 years ago.
| yvdriess wrote:
| Compare the number of players with leading edge fabs then and
| now though.
| cogman10 wrote:
| Yup, the major change has been the capital to get new fabs
| off the ground has become unimaginable. TSMC is practically
| the only game in town for chip manufactures ATM, everyone
| else that will fab 3rd party designs is way behind.
|
| GlobalFoundries state of the art, for example, is a 12nm
| process. TSMC sits at 5nm, about 4 generations ahead.
| duped wrote:
| There are trillions of dollars in capital floating around
| looking for a better place to park it than treasuries.
| Major infrastructural projects like semi fabs should be a
| no brainer - the risk is not that high due to evergrowing
| demand and the trust that governments won't let an Intel
| or TSMC fail.
|
| Even just look at the VC landscape - there was $621
| billion spent in venture capital globally last year,
| which is one of the worst ways to invest your cash.
|
| Point being there's plenty of capital out there for giant
| projects like building fabs, I just don't think it's sexy
| enough yet or the financiers haven't taken a deep enough
| look while governments are expected to make the first
| moves.
| kken wrote:
| There were no players without fabs back then.
| smoldesu wrote:
| And they still would have been right?
| mhh__ wrote:
| > becoming a big player
|
| Are you saying they aren't a big player now?
| m_mueller wrote:
| Gartner puts them at Nr. 2 in 2021 after Samsung Electronics.
| However it should be noted that for Intel this seems to
| include total Revenue while for others it seems to be just
| their pure semiconductor revenue. If Intel were to sell their
| chip manufacturing as a subsidiary to themselves at market
| price, that subsidiary probably would be way further down the
| list.
| throwaway4good wrote:
| Wouldn't this require them to start making SOCs for mobile
| phones?
| throwaway4good wrote:
| In other words producing for chip designers such as Apple,
| Qualcomm, or Samsung.
| ChrisMarshallNY wrote:
| US-based TSMC.
|
| They have a good chance of succeeding. They are likely to
| get a lot of government help.
|
| They'll probably start with older systems, as there's
| already a huge need for these, and they have a gazillion
| existing fabs. It won't compete with their current lines,
| and means they don't need to mothball their legacy fabs.
| unfocussed_mike wrote:
| > They are likely to get a lot of government help.
|
| Indeed -- the not so subtle subtext of their pitch is _"
| China, eh? Have fun with that."_. So a pitch based on the
| idea that it's strategically important to bring that chip
| manufacturing "home".
|
| Which is why they picked Israel. /s
| ChrisMarshallNY wrote:
| _> Which is why they picked Israel._
|
| Well, there's a lot of history in that relationship.
|
| Israel really does have some of the finest scientists and
| engineers in the world -partly thanks to the antisemitism
| of a lot of other nations.
|
| I have a feeling that Israel (and Iran) have the
| potential to completely transform the Mideast, but all
| that fighting is keeping that from happening. If they
| ever started to work in cooperation with some of their
| neighbors, we'd see a new power bloc emerge.
|
| If they ever actually have a real, lasting peace, out
| there, the rest of the world had better hang on, as every
| single one of those nations would _love_ to not have to
| be dependent on some superpower.
| unfocussed_mike wrote:
| Yes. I guess what I meant is that there could be an
| element of the strategic in the choice, particularly for
| a business that seeks government money in the near future
| if the US House of Representatives does swing back to GOP
| control.
|
| Though Tower Semi are clearly _enormously_ capable, so it
| 's hardly a bad acquisition, even absent seeking access
| to a pot of money with a strategic aspect to it.
| yyyk wrote:
| >Well, there's a lot of history in that relationship.
|
| The Israel branch basically saved Intel when NetBurst
| failed completely - at the time Intel was behind as much
| as today.
| recuter wrote:
| > I have a feeling that Israel (and Iran) have the
| potential to completely transform the Mideast, but all
| that fighting is keeping that from happening. If they
| ever started to work in cooperation with some of their
| neighbors, we'd see a new power bloc emerge.
|
| That's exactly what is happening. The emerging power
| block in the Middle East is Israel+Arab States vs Iran
| with Turkey playing its own game.
|
| https://en.wikipedia.org/wiki/Abraham_Accords
|
| An Ayatollah free Iran has huge potential, very true.
| There are reasons for cautious optimism. None of this has
| anything to do with Intel/Tower however.
|
| The Intel presence in Israel goes back generations and
| Tower is a cheap and obvious pickup for them.
| ac29 wrote:
| Qualcomm is a customer for IFS:
| https://www.anandtech.com/show/16846/intels-first-
| highprofil...
|
| Samsung has their own fabs, and I suspect Apple will
| manufacture with whoever has the most advanced process
| (so, TSMC for the next couple years at least).
| jabl wrote:
| Intel Foundry Services (IFS) is marketing themselves as
| the only fab capable of producing all three of x86, Arm,
| and RISC-V.
|
| Back when Intel had a process advantage over everybody
| else I guess it made strategic sense for them to not let
| others use their process. Now when that process lead is
| gone, refusing to fab chips for non-x86 ISA's just means
| those customers will go elsewhere.
| throwaway81523 wrote:
| > Intel Foundry Services (IFS) is marketing themselves as
| the only fab capable of producing all three of x86, Arm,
| and RISC-V.
|
| Capable? From the fab point of view, all three of those
| are just rectangles.
| sanxiyn wrote:
| I mean, same rectangles won't work for different
| foundries. It is saying we have these IP cores tested and
| working with the process.
| jabl wrote:
| This, and also the licensing question. Intel has said
| they will license x86 cores for use in 3rd party
| SoC's/chiplets, but maybe only if you use IFS.
| codys wrote:
| That sounds a lot like a tying arrangement, which could
| be unlawful under US anti-trust laws.
| ginko wrote:
| > Intel Foundry Services (IFS) is marketing themselves as
| the only fab capable of producing all three of x86, Arm,
| and RISC-V.
|
| TSMC is producing all of these. Not like the architecture
| matters from a foundry POV anyways.
| jabl wrote:
| TSMC is producing some x86 cpu's for Intel. I think what
| they're saying here is that they will license x86 cores
| for integrating into 3rd party SoC's/chiplets, but only
| if you use IFS.
| ginko wrote:
| They're also producing all x86 CPUs for AMD.
| [deleted]
| jabl wrote:
| Yes [1]? The argument is about whether Intel refuses to
| license their processor designs to 3rd parties to be
| fabbed in any random fab.
|
| [1] Evidently the x86 cross licensing deals between AMD
| and Intel doesn't preclude AMD from using 3rd party fabs.
| jcranmer wrote:
| As far as I'm aware, all current Intel x86 CPUs are Intel
| fab-only, although
| https://www.tomshardware.com/uk/news/intel-to-outsource-
| some... suggests that TSMC x86 CPUs might come out in
| 2023.
| [deleted]
| kken wrote:
| >f becoming a big player in the semiconductor industry in the
| next decade
|
| Did you mean
|
| "a big player in the semiconductor _foundry_ industry in the
| next decade" ?
|
| Intel has been the biggest semi player for most years during
| the last three decades.
| mmmBacon wrote:
| Where do you get that the profit margins are tiny? TSMC has a
| net profit margin of 38%; that's higher than Google (27%).
| Shadonototra wrote:
| They don't have a strategy, they react to their downfall and
| are rushing to find a solution
|
| They are lucky the pandemic happened, it gave them the
| opportunity to take a step back and realize how screwed they
| are
| gigatexal wrote:
| Is this Intel's PASemi moment or something entirely different?
|
| Remember PASemi were the folks Apple bought that gave us the A
| series chips and made Apple the chip powerhouse it is today.
| sanxiyn wrote:
| I think it's entirely different. Tower is a specialty foundry.
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