American chip manufacturer Intel announced Tuesday it will acquire Israeli company Tower Semiconductor for $5.4 billion.

Intel said in a statement that it will pay $53 per share in cash for Tower Semiconductor.

Tower Semiconductor stock price soared 40% at Tel Aviv Stock Exchange after the announcement, while Intel shares were down 0.1% on the Nasdaq in limited pre-market trades.

“Tower’s specialty technology portfolio, geographic reach, deep customer relationships and services-first operations will help scale Intel’s foundry services and advance our goal of becoming a major provider of foundry capacity globally,” Intel CEO Pat Gelsinger said in the statement.

“This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors,” he added.

Tower Semiconductor CEO Russell Ellwanger said the company has built a range of specialty analog foundry solutions based on deep customer partnerships with worldwide manufacturing capabilities.

“Together with Intel, we will drive new and meaningful growth opportunities and offer even greater value to our customers through a full suite of technology solutions and nodes and a greatly expanded global manufacturing footprint,” he said.

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