On February 14, The Wall Street Journal reported that Intel is working on an offer of nearly $6 billion for buying Tower Semiconductor Ltd. (TSEM). This resulted in an upsurge in the price of the company’s stock in the after-hours.
The Israeli chip maker’s stock remained in the red during the regular session with a loss of 1.98%. TSEM closed the session at $33.13 per share at a volume of 1.05 million shares. Following the emergence of the buyout reports, the stock surged up by a huge 48.05% in the after-hours. Hence, TSEM stock was trading at $49.05 per share in the after-hours on Monday.
Founded in 1993, the semiconductor manufacturer, Tower Semiconductor Ltd. has a market capitalization of $3.8 billion. The company was able to add 0.2 billion to its market cap on the reports of the Intel deal.
The Potential $6B Deal
As per reports, Intel is planning to build cutting-edge chip factories in order to take on the tech giant Taiwan Semiconductor Manufacturing, which is the world’s largest contract chipmaker. Intel pledged over $43.5 billion last year for spending on new chip fabrication plants in Arizona and Ohio as well as expansion to New Mexico. This all comes at a time when the world is facing a global semiconductor shortage, hampering the production of most devices including cars and smartphones. According to WSJ, Intel is currently nearing a $6 billion potential deal for TSEM. Furthermore, a deal could be announced as soon as this week.
TSEM’s Recent Announcement
On December 21, TSEM and Juniper Networks announced the world’s first silicon photonics (SiPho) foundry-ready process with integrated III-V lasers, amplifiers, modulators, and detectors. This will enable next-generation optical communications for telecoms and datacenters. Along with that, emerging applications in AI and LiDAR for autonomous vehicles.
Juniper Networks, a leader in secure, AI-driven networks, is working on silicon photonics in partnership with the company.
TSEM’s Financials
In the third quarter of 2021, the company’s revenue increased organically by 40% YOY to $387 million.
Furthermore, TSEM had an adjusted net profit of $45 million in the third quarter of 2021. Therefore, the adjusted earnings were $0.42 per basic share and $0.41 per diluted share in the quarter.
Additionally, the company is set to declare its financial results for the fourth quarter and full-year 2021 on February 17, 2022. The company will host the earnings conference call on Thursday at 10:00 a.m. EST.
