Tower Semiconductor disclosed that Intel has signaled its intention to terminate their wafer manufacturing partnership. The companies have reportedly entered mediation, casting uncertainty on the future of their collaboration.
The relationship dates back to Intel's failed acquisition attempt of Tower in 2023. Following that collapse, the companies forged a foundry agreement where Tower would utilize Intel's New Mexico fab (Fab 11X) for 12-inch wafer production. The termination would end this two-year manufacturing arrangement.
Tower has assured a smooth transition, noting that affected customer processes, initially qualified at Intel's facility, are being redirected to Tower's own Japan Fab 7. Despite this disruption, Tower reported robust financial results with record Q4 revenue of $440 million and full-year 2025 revenue of $1.57 billion.
Looking ahead, Tower announced a $270 million investment in compound semiconductor capacity, focusing on silicon photonics and silicon germanium. This brings total investment in these areas to $920 million, with production targeted for 2027. Over 70% of silicon photonics capacity through 2028 is already pre-booked.
ICgoodFind : Intel's move to terminate the foundry deal marks another shift in its external manufacturing strategy. Tower, however, demonstrates resilience with strong quarterly results and a clear capacity expansion roadmap, efficiently pivoting back to its own fabs while aggressively investing in high-growth specialty technologies.
