TSEM Stock Rockets On Reported Intel Buyout

Tower Semiconductor (TSEM) shares rocketed late Monday after a news report said Intel (INTC) is nearing a deal to buy the Israel-based chip foundry. TSEM stock jumped nearly 50% on the news.

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After the market close on Monday, the Wall Street Journal reported that Intel is working on a roughly $6 billion offer for Tower Semiconductor. The Journal said a deal could be announced as soon as this week.

Tower plans to report its fourth-quarter financial results early Thursday.

The news comes as Intel is planning to build cutting-edge chip factories to take on technology leader Taiwan Semiconductor Manufacturing (TSM). Over the last year, Intel has pledged to spend more than $43.5 billion on new chip fabrication plants, or fabs, in Arizona and Ohio and the expansion of a factory in New Mexico.

TSEM Stock Heads Skyward

In extended trading on the stock market today, TSEM stock surged 48.2%, near 49.10. Intel stock climbed 0.2%, near 47.65.

TSEM stock ended the regular session Monday at 33.13, giving it a market valuation of about $3.6 billion.

Tower makes chips for applications ranging from cars and consumer electronics to industrial and medical gear. It operates factories in in Israel, Japan and the U.S.

TSEM stock ranks seventh out of 41 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 88 out of 99. Intel ranks No. 22 in the group with an IBD Composite Rating of 60.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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