External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

Equity Bottom-Up

Key points (machine generated)<ul><li>Tower Semiconductor is currently undervalued and presents a compelling opportunity for long-term investors.</li><li>The stock is trading at just a quarter of the price Intel was willing to pay for it, indicating a lack of appreciation by the market.</li><li>The lack of coverage and silence during the Intel deal, as well as being an Israeli company, may deter some investors, but Tower has the potential for significant growth and ongoing capacity expansion projects, making it an attractive investment with the potential for a 3x return over the next three years.</li></ul>This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key points (machine generated)Tower Semiconductor is currently undervalued and presents a compelling opportunity for long-term investors.The stock is trading at just a quarter of the price Intel was willing to pay for it, indicating a lack of appreciation by the market.The lack of coverage and silence during the Intel deal, as well as being an Israeli company, may deter some investors, but Tower has the potential for significant growth and ongoing capacity expansion projects, making it an attractive investment with the potential for a 3x return over the next three years.This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Tower Semiconductor Ltd (TSEM) - Wednesday, Oct 18, 2023

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<ul>
<li>The agreement helps Intel fill up some long-underutilised fab capacity at their Rio Rancho, New Mexico facility</li>
<li>Tower likely gets a bargain-basement opportunity to increase their percentage of 300mm wafer capacity</li>
<li>Tower's automotive business grew from 11% of revenues in 2022 to 19% of revenues in H1'23. Greater 300mm capacity will help them meet this demand once foundry starts to recover. </li>
</ul>


The agreement helps Intel fill up some long-underutilised fab capacity at their Rio Rancho, New Mexico facility
Tower likely gets a bargain-basement opportunity to increase their percentage of 300mm wafer capacity
Tower's automotive business grew from 11% of revenues in 2022 to 19% of revenues in H1'23. Greater 300mm capacity will help them meet this demand once foundry starts to recover. 


Intel's Deal With Tower Semi Is Basically A Rent-A-Fab Scheme

<ul>
<li>Tower to collect a cool $353 million termination fee from Intel</li>
<li>Intel claims its foundry ambition to become the global #2 by end of the decade remains unchanged</li>
<li>The key thing Intel needed from Tower was access to its broad, diverse portfolio of specialty process technologies. These will take Intel years to develop on their own.  </li>
</ul>


Tower to collect a cool $353 million termination fee from Intel
Intel claims its foundry ambition to become the global #2 by end of the decade remains unchanged
The key thing Intel needed from Tower was access to its broad, diverse portfolio of specialty process technologies. These will take Intel years to develop on their own.  


Thematic (Sector/Industry)

<ul>
<li>The role has been vacant for &gt; 3 months. Why wait till now to chose an obvious in-situ candidate?</li>
<li>Closure date for the Tower acquisition has been pushed out to H1 2023 from Q1 2023 according to an Intel filing on January 27 last</li>
<li>Intel's fortunes have changed dramatically for the worse over the past year. It's debatable whether the Tower acquisition makes sense any more. </li>
</ul>


The role has been vacant for &gt; 3 months. Why wait till now to chose an obvious in-situ candidate?
Closure date for the Tower acquisition has been pushed out to H1 2023 from Q1 2023 according to an Intel filing on January 27 last
Intel's fortunes have changed dramatically for the worse over the past year. It's debatable whether the Tower acquisition makes sense any more. 


Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>Transaction is expected to be immediately accretive to Intel’s non-GAAP EPS. The stock market reacted exciting for Tower raised 42% to reach $47.07 and Intel raised with ~1.8% respectively.</li>
<li>Tower Semiconductor is emphasized on analog semiconductor specialty foundries. Namely, it’s different from TSMC, UMC and GlobalFoundries, which are focusing on digital products original, and expand into analog afterward. </li>
<li>Intel wants to march into foundry business and have to count on Tower to bring in such operation know-hows, but Intel has to tolerate a completely different system.</li>
</ul>


Transaction is expected to be immediately accretive to Intel’s non-GAAP EPS. The stock market reacted exciting for Tower raised 42% to reach $47.07 and Intel raised with ~1.8% respectively.
Tower Semiconductor is emphasized on analog semiconductor specialty foundries. Namely, it’s different from TSMC, UMC and GlobalFoundries, which are focusing on digital products original, and expand into analog afterward. 
Intel wants to march into foundry business and have to count on Tower to bring in such operation know-hows, but Intel has to tolerate a completely different system.


Tower Semiconductor (TSME.US): To Be Merged by Intel- A Fastest Way, but a Patience Test, Too.

Israel

Tower Semiconductor Ltd. (TowerJazz) is an independent foundry providing semiconductor integrated circuits manufacturing & related design services. The Company manufactures wafers using its technologies & production capability and the proprietary designs of its customers. TowerJazz's integrated circuits are incorporated into a wide range of products in diverse markets.

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Tower Semiconductor (TSEM US)

Tower Semiconductor Ltd (TSEM) - Wednesday, Oct 18, 2023

Tower Semiconductor is currently undervalued and presents a compelling opportunity for long-term investors, with the potential for significant...

Value Investors Club (VIC)

Intel's Deal With Tower Semi Is Basically A Rent-A-Fab Scheme

Intel's recently announced "Capacity Corridor" deal with Tower help them fill up some long-underutilised fab capacity at their Rio Rancho, New...

William Keating

Intel Terminates Tower Semi Deal

Tower to collect a cool $353 million termination fee. Intel claims its foundry ambition remains unchanged, but not gaining access to Tower's...

William Keating

Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition

Waiting >3 months to finally fill the role with an obvious in-situ candidate strongly suggests that the original plan has fallen apart. We think...

William Keating

Tower Semiconductor (TSME.US): To Be Merged by Intel- A Fastest Way, but a Patience Test, Too.

Intel wants to march into foundry business and have to count on Tower to bring in such operation and know-hows, but Intel has to tolerate a...

Patrick Liao

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