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Comment by lnsru | Hacker News Reader

When reading headline I was thinking about Intel removing its competitor. Then I searched a bit and found this: “ Tower Semiconductor Ltd. is an Israeli company that 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 as well as MEMS capabilities.”

Looks like that Intel wants to go deeper in foundry business offering more services. I can speculate, that Intel has very good silicon process for logic circuits and will improve their offerings with technology from this acquisition. Sounds like a reasonable strategy to me.

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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)_/¯

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...

they are purposely built their for Geo-political reasons, to ensure those area's stay "disputed"

Or the disputed places make unusual investments due to their status?

I disagree. Israel is unique in terms of it's human capital. Tech companies have locations there for the same reasons they have locations in Oxford and Cambridge in the UK. There are 135 per 10,000 people employed as engineers there, compared to the next closest which is the US at 70 per 10k. That would already be a unique draw for Intel, if it weren't for the original reason they set up shop there; Dov Frohman. He was the first GM at Intel (also the inventor of EPROM), and wanted to relocate there to accept a Professorship. They didn't want to lose him, so they agreed to let him open an R&D lab there. This ended up being a huge success (they designed the 8087 there) and they continued to grow on that success, to the point where Intel is now the largest private employer in Israel.

I recommend Asianometry's video essay on Intel's success in Israel: https://www.youtube.com/watch?v=3lEgJQgAw3g&t=894s

He also covers the rise of such silicon manufacturing in Taiwan - which I also disagree on it being geo-politically motivated, with it being successful long before it's national identity came under threat from mainland China.

I think the issue of "how to reunite the rogue republic of Taiwan with the motherland" predates silicon manufactoring in Taiwan by a few years :-D

The "geopolitics" is played up as the US now needs an excuse for aggressive industrial policies aiming to move jobs from "allieds" such as South Korea and Taiwan and back into the US.

Pat Gelsinger panders to this as he eyes a windfall for his business, so much that it is getting harsh reactions from Taiwan:

Intel CEO: Taiwan Isn’t a Stable Place. TSMC Founder Has Other Concerns

https://techtaiwan.com/20211207/gelsinger-intel-taiwan/

Completely absurd comment. Israel is a minnow in the semiconductor manufacturing industry and many fabs are located in Taiwan because Taiwanese people invented the foundry business.

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

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.

https://en.m.wikipedia.org/wiki/Palestinian_rocket_attacks_o...

There's a lot more water in the Golan Heights, which is really why Israel decided to take it over in the first place.

Water is crucially important to fabs, true. But get real, water is important for everything in Israel, and why it had strategic value to warrant annexing it after the whole--the whole war that happened, the casus bellum of which cannot be done justice in short comments like this.

The parent said Israel took over Golan Heights for its water, not "...for its water for fabs".

Fair. But my argument is with it constituting encroachment, like Syria in no way brought that territorial loss upon itself in any capacity.

My objection was one-sided denigration of Israel when it appears--in the comment I replied to, it was mild and implied--which mitigates things. Can't help notice Anti-Israel speech as gotten to be very common on HN in the last two years. If you want to criticize or even denounce Israel, this forum is for sure an appropriate time and place for that, and it appears nobody will claim anti-Semitism in the 2020's like they would in the past (as far as I can tell, this decade only American Jews are off limits, Israel is fair game).

But historical falsifications are where I draw the line. I claim that is incredibly dangerous, leads people to believe that a group--here, it's Israeli Jews--is morally inferior. Do you know what happened next in the Middle Ages, or the Renaissance, or the Enlightenment, or even in the 19th century, any time the stereotype of moral inferiority took hold?

That is precisely the moment to "speak for the Jews," as the poem put it.

More accurately, it meant 'Syria wouldn't be able to deprive Israel of its single biggest water source'.

https://en.wikipedia.org/wiki/Headwater_Diversion_Plan_(Jord...

Israel is so small that according to your definition of "next" everything has to be "next" to the Gaza Strip, the Golan Heights and the West Bank, and also to Lebanon, Syria Egypt and Jordan for good measure.

Seriously, Tower is far away from the Golan Heights in the Israeli sense. It is however in the Galilee (big Arab population) and "near" the West Bank.

I think the closeness to the Technion university and to Intel's partners factories (KLA Temcor...) is a much more significant factoid

> 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.

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

Intel is paying for a foot into the foundry business door.

https://ir.towerjazz.com/static-files/fc758c75-c7fd-4f87-9d1...

looking at the latest report. Tower is like TSMC for specialty chip. i think this will be great if Intel want to go all in on IDM 2.0

These technologies are key to certain high speed applications. As we move from monolithic devices to MCMs with lots of high-speed IO these technologies will be important.

Tower is one of the most capable CMOS image sensor fabs. They're generally used by MFT manufacturers for their image sensors.

The other, and the biggest player in this image sensor business is Sony.

This is a completely different lithography and technology when compared to CPUs and GPUs (larger feature sizes, different requirements, etc.).

Intel's transforming itself to be a fab operator it seems.

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