News
Intel withdraws from Tower Semiconductor manufacturing agreement and reallocates to Uozu factory
Friday, February 13, 2026 at 06:23 AM
Intel has reportedly withdrawn from its manufacturing agreement with Tower Semiconductor, leading to a reallocation of production tasks to the Uozu factory.
Context
Intel has notified Tower Semiconductor of its intent to withdraw from a $300 million manufacturing agreement, dismantling a strategic partnership established in September 2023. This deal was originally struck shortly after Intel’s $5.4 billion acquisition of the Israeli firm collapsed due to regulatory hurdles. Under the contract, Tower was to install equipment at Intel’s New Mexico plant to secure a capacity of over 600,000 photo layers per month for 300mm wafers, focusing on advanced power management and radio frequency technology.
The companies are now in mediation regarding the contract termination. Tower Semiconductor is redirecting production flows to its Fab 7 facility in Japan to mitigate the impact on its customer base. This sudden reversal signals a breakdown in the strategic bridge meant to salvage the relationship after the failed merger and raises questions about Intel Foundry's ability to maintain long-term third-party partnerships during its ongoing corporate restructuring.
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