Tower Semiconductor Ltd. will use an Intel Corp. fabrication plant in Rio Rancho, New Mexico, to produce power management chips.

The chips will be made as part of a manufacturing partnership that the companies detailed this morning. The deal comes about 18 months after Intel made a $5.4 billion offer to buy Tower. Last month, the chip giant had to scrap the transaction because it failed to receive regulatory approval in China. 

Israel-based Tower makes analog chips, which process electricity in a different way than digital circuits such as central processing units. Analog chips typically aren’t used to perform computations. Instead, they’re optimized for auxiliary tasks such as processing the Wi-Fi signals that a handset receives through its built-in modem.

Tower’s new partnership with Intel will see the former company buy up to $300 million worth of semiconductor manufacturing gear and related assets. It will send this gear to a chip plant called Fab 11X that Intel operates in Rio Rancho, New Mexico. Once hardware installation is complete, the facility will produce chips for Tower customers.

Intel invested $3.5 billion in 2021 to upgrade Fab 11X’s production lines. At the time, the company detailed that the facility focuses on making chip packaging technologies. One of those technologies, a hardware component called Foveros, allows Intel to create three-dimensional processors by stacking multiple semiconductor modules atop one another. 

Tower detailed that it plans to produce power management chips at Fab 11X. Such chips can be found in smartphones, electric vehicles and a variety of other systems. They’re used to manage how electricity is distributed to a device’s subcomponents.

The power management chips that Tower will make at Fab 11X are set to be produced using a 65-nanometer process. They will be based on BCD technology, an approach to making chips that involves placing three different types of transistors on a single circuit.

Tower stated that its partnership with Intel will also focus on radio RF SOI chips. Such chips are used to power smartphones’ wireless networking features. They’re suitable for, among other tasks, processing data sent over 5G connections.

“This collaboration with Intel allows us to fulfill our customers’ demand roadmaps, with a particular focus on advanced power management and radio frequency silicon on insulator (RF SOI) solutions, with full process flow qualification planned in 2024,” said Tower Chief Executive Officer Russell Ellwanger.

Intel says that Fab 11X will provide more than “600,000 photo layers per month” of manufacturing capacity for Tower. Modern chips consist of multiple metal layers that are stacked atop one another. Those layers, in turn, are made with the help of a device called a photomask that uses powerful light beams to carve transistors into the surface of a circuit. 

Manufacturing will be carried out by Intel’s foundry business. The business, which is also known as IFS, is at the center of the chipmaker’s long-term growth strategy. IFS uses Intel fabs to produce semiconductors for other companies based on their custom designs. 

Image: Intel