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Intel to Acquire Tower Semiconductor for $5.4B

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Re: Intel to Acquire Tower Semiconductor for $5.4B

#41

Post by formercoder »

adventured wrote: post #28
throwaway4good wrote: post #13

Earlier quoted context omitted.

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?!

> 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.

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.

Re: Intel to Acquire Tower Semiconductor for $5.4B

#42

Post by Fatnino »

otherotherchris wrote: post #16
throwaway4good wrote: post #13

Earlier quoted context omitted.

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?!

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. ¯\_(ツ)_/¯

Just how big do you think Israel is that you expect there to be a location not "near" Hamas or Hezbollah controlled territory?

Re: Intel to Acquire Tower Semiconductor for $5.4B

#43

Post by shashashasha___ »

nisegami wrote: post #20
throwaway4good wrote: post #19

Earlier quoted context omitted.

Yeah, yeah. A bit to chat about when Pat Gelsinger roams about thrashing TSMC for having their fabs at an insecure location.

Kinda spooky how much of the cutting edge semiconductor fabs are in disputed territories...

that area is not considered disputed at all. there is a difference between insecure and disputed or maybe I'm getting it wrong?

Re: Intel to Acquire Tower Semiconductor for $5.4B

#45

Post by ckozlowski »

recuter wrote: post #18
comboy wrote: post #7

For anyone interested in the topic of semiconductors industry this channel provides some great info and explanations: https://www.youtube.com/watch?v=GbkFAO1oUu8

Also recommend https://www.youtube.com/watch?v=3lEgJQgAw3g

I was coming here to post this actually, as they had a little snippet at the end about Tower as well. Great channel.

Re: Intel to Acquire Tower Semiconductor for $5.4B

#46

Post by HideousKojima »

Fatnino wrote: post #42
otherotherchris wrote: post #16

Earlier quoted context omitted.

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. ¯\_(ツ)_/¯

Just how big do you think Israel is that you expect there to be a location not "near" Hamas or Hezbollah controlled territory?

"Near" and "Near but not within rocket/artillery range" are significant differences though.

Re: Intel to Acquire Tower Semiconductor for $5.4B

#47

Post by mastax »

chrisjc wrote: post #37

> 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 t…

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.

Re: Intel to Acquire Tower Semiconductor for $5.4B

#48

Post by unfocussed_mike »

adventured wrote: post #28
throwaway4good wrote: post #13

Earlier quoted context omitted.

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?!

> 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.

AMD isn't a comparable business for this list, because it no longer has fab facilities. That was spun off to GlobalFoundries.

Re: Intel to Acquire Tower Semiconductor for $5.4B

#49

Post by unfocussed_mike »

ChrisMarshallNY wrote: post #15
throwaway4good wrote: post #12

Earlier quoted context omitted.

In other words producing for chip designers such as Apple, Qualcomm, or Samsung.

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.

> 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

Re: Intel to Acquire Tower Semiconductor for $5.4B

#50

Post by jabl »

ginko wrote: post #29
jabl wrote: post #22

Earlier quoted context omitted.

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.

> 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.

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.
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