Amid shortage, U.S. chipmaker Intel buys Tower Semiconductor for $5.4 billion

Feb. 15 (UPI) -- U.S. chipmaker Intel announced on Tuesday that it will buy Tower Semiconductor in a deal worth more than $5 billion -- allowing the company to expand its tech portfolio further into a segment of the industry that's been hit hard by global shortages over the past couple years.

Intel said in its announcement that it's agreed to buy the Israeli chip company for $5.4 billion, or $53 per Tower share.

California-based Intel said it made the deal to expand its "manufacturing capacity, global footprint and technology portfolio to address unprecedented industry demand."

A global shortage of semiconductor chips since the start of the COVID-19 pandemic has created significantly higher demand and supply chain disruptions in virtually all developed countries.

Founded in 1968, Intel is the world's largest producer of semiconductor chips by revenue. UPI Photo/File

An industry report on Tuesday said that sales of semiconductor chips in 2021 rose to a record $556 billion.

"This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes -- unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors," Intel CEO Pat Gelsinger said in a statement.

Tower specializes in chips used in production of vehicles, medical sensors and power management.

Intel's board unanimously approved the acquisition of Tower, which is expected to close in about a year.