Two weeks after abandoning its $5.4 billion acquisition bid for Tower Semiconductor due to regulatory hurdles, Intel has revealed a new partnership agreement. Under this fresh arrangement, Intel will provide foundry services and manufacturing capacity to Tower Semiconductor.

In this updated collaboration, Tower Semiconductor will invest up to $300 million to acquire equipment and other assets that will be stationed within Intel's manufacturing facility in New Mexico, USA, operated by Intel Foundry Services. As part of the agreement, Intel will undertake the manufacturing of Tower's 65-nanometer power management BCD (bipolar-CMOS-DMOS) flows. Tower Semiconductor already possesses its manufacturing facilities in Israel (150mm and 200mm), the United States (200mm), Japan (200mm and 300mm), and soon in Italy through its partnership with STMicroelectronics.

This partnership is expected to significantly boost Tower Semiconductor's capacity, adding more than 600,000 photo layers per month to support advanced analogue processing for 300mm and meet projected customer demand.

Stuart Pann, Intel's Senior Vice President and General Manager of Intel Foundry Services, expressed enthusiasm about the collaboration, stating, "We launched Intel Foundry Services with a long-term vision of establishing the world’s first open system foundry that integrates a secure, sustainable, and resilient supply chain with the best of Intel and our ecosystem. We're delighted that Tower recognizes the unique value we offer and has selected us to open their 300mm US capacity corridor."

Russell Ellwanger, the CEO of Tower Semiconductor, also shared his excitement about continuing the partnership with Intel. He emphasized their commitment to expanding customer relationships by engaging in large-scale manufacturing of cutting-edge technology solutions. The collaboration will prioritize advanced power management and radio frequency silicon on insulator (RF SOI) solutions, with full process flow qualification scheduled for 2024. Ellwanger sees this as the initial step toward multiple innovative synergistic solutions with Intel.

It's worth noting that Intel had to abandon its earlier plan to acquire Tower Semiconductor for $5.4 billion last month due to delays in obtaining regulatory approvals, particularly in China. As part of the new agreement, Tower will receive a $353 million termination fee from Intel.