: Tower Semiconductor stock soars 50% on report Intel near $6 billion deal to buy the Israel-based chip maker

Intel Corp. is close to a $6 billion deal to buy Tower Semiconductor Ltd., according to a report late Monday, sending U.S.-traded shares of the Israel-based chip maker soaring in the extended session.

After the close of markets on Monday, the Wall Street Journal reported that Intel

was using the deal to expand its manufacturing operations, and that the deal could be announced this week if talks do not fall apart, according to unnamed sources close to the matter.

U.S.-traded shares of Tower


soared 50% after hours, following a 2% decline in the regular session to close at $33.13. At Monday’s close, the company had a market capitalization of $3.54 billion, according to FactSet data.

Read: Semiconductor sales top half a trillion dollars for the first time, and are expected to keep growing

The company, which makes a wide variety of chips ranging from those catering to the consumer, industrial, automotive and mobile markets, has manufacturing facilities —- called “fabs” in industry parlance — in Migdal Haemek, Israel; Agrate, Italy, Newport Beach, Calif.; and San Antonio, Texas, according to Tower’s website.

Tower also owns a 51% stake in TPSCo. with Nuvoton Technology Corp.

having a 49% stake. That partnership has three fabs in Japan that specialize in integrated circuits, more than 750 million of which have gone to the auto industry, according to Tower.

Intel has pledged to build out its manufacturing capacity, earmarking up to $28 billion for 2022 back in October, and recently said it will spend more than $20 billion to build a “mega-site” fab in Ohio, as well as $20 billion for sites in Arizona. The move to build capacity has met with concern from analysts because Intel’s spending is punishing the company’s gross margins.

This post was originally published on Market Watch

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