Tower Semiconductor accused of misappropriating intellectual property

Earlier this year, Intel announced that it would acquire Israeli semiconductor manufacturer Tower Semiconductor for $53 per share in cash for a total price of about $5.4 billion. The transaction is expected to be completed in February 2023. Intel said that the other party is a leading analog semiconductor solution foundry, which can greatly advance its IDM 2.0 strategy, further expand its manufacturing capabilities, and provide a richer and more differentiated technology portfolio. It is a highly complementary transaction.

Intel’s acquisition isn’t done yet, but Tower Semiconductor is in trouble. According to The Register, recently, IQE, a compound semiconductor wafer manufacturer based in Cardiff, UK, filed a lawsuit against Tower Semiconductor alleging misappropriation of its intellectual property.

IQE said there was “significant evidence” that Tower Semiconductor had misappropriated its technology, seriously undermining IQE’s competitiveness and the vast resources invested in technology research and development and patent filings. The current claim focuses on the porous silicon technology, which is primarily used to make components for 5G and advanced sensors. France-based semiconductor maker Soitec, for example, uses related technologies to make components for 5G phones.

In a note to investors, Damindu Jayaweera, a financial analyst at investment bank Peel Hunt, agreed with “significant evidence” of IQE’s claims, saying some of the current manufacturers’ components are related to porous silicon technology.