After mutually dropping planned merger deal, Intel Foundry Services (IFS) and Tower Semiconductor entered foundry services involving Intel’s 300mm facility in Mexico. Particularly, Tower will invest up to US$300 million to acquire and own equipment and other fixed assets to be installed in the New Mexico facility.

The new deal will provide a new capacity corridor of over 600,000 photo layers per month for Tower’s future growth. Thus, enabling capacity to support forecasted customer demand for 300mm advanced analog processing.

This agreement demonstrates the commitment from both Intel and Tower to expand their respective foundry footprints with unparalleled solutions and scaled capabilities. Accordingly, Intel will manufacture Tower’s 65nm power management bipolar-CMOS-DMOS (BCD) flows, among other flows at Intel’s Fab 11X in Rio Rancho, New Mexico.

Bats for Secure, Sustainable Supply Chain

Stuart Pann, Intel senior vice president and general manager of Intel Foundry Services, said, “We launched Intel Foundry Services with a long-term view of delivering the world’s first open system foundry. (This) brings together a secure, sustainable, and resilient supply chain with the best of Intel and our ecosystem.”

On the other hand, Tower CEO Russell Ellwanger said, “As we look to the future, our primary focus is to expand our customer partnerships through high-scale manufacturing of leading-edge technology solutions. This collaboration with Intel allows us to fulfill our customers’ demand roadmaps…We see this as a first step towards multiple unique synergistic solutions with Intel.”

This agreement shows how IFS enables access to corridors of manufacturing capacity across Intel’s global factory network, including in the U.S., Europe, Israel and Asia. In addition to existing investments in Oregon and planned investments in Ohio, Intel has been investing and innovating in the Southwest region of the United States. Moreover, Intel previously announced a $3.5 billion investment to expand operations in New Mexico and equip its Rio Rancho campus. Particularly, in one of its innovation hubs, for the manufacturing of advanced semiconductor packaging.

For Tower, this is the next step in its path to increased scale. Hence, serving an expanding customer base in 300mm technologies led by strong market adoption of its industry-leading 65nm BCD power and RF SOI technologies. Specifically, Tower’s 65nm BCD technology offers customers improved power efficiency, die-size and die cost through its best-in-class Rdson figure of merit.

Similarly, Tower’s 65nm RF SOI technology helps its customers reduce handset battery consumption while improving wireless connections through its best-in-class RonCoff figure of merit. The increased scale resulting from this agreement will enable Tower not only to serve larger opportunities with existing technologies but also enhance partnerships with industry-leading customers that will help forge strong next-generation technology roadmaps.

Propels IDM 2.0 Strategy

IFS is a critical pillar of Intel’s IDM 2.0 strategy. For that reason, the latest announcement represents another step forward in Intel’s multiyear transformation to regain and strengthen technology leadership, manufacturing scale, and long-term growth. IFS has made significant strides over the past year as demonstrated by its more than 300% year-over-year revenue increase in the second quarter of 2023. This momentum also carries Intel’s recent agreement with Synopsys to develop a portfolio of intellectual property on Intel 3 and Intel 18A process nodes. Moreover, Intel also bagged the U.S. Department of Defense’s Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program, with five RAMP-C customers in design engagement on Intel 18A.