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Patrick Gelsinger, chief executive officer of Intel Corp., speaks during a Bloomberg Studio 1.0 interview at the company’s headquarters in Santa Clara, California, Feb. 3, 2022.
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Intel agreed to buy Tower Semiconductor for $5.4 billion, the company announced Tuesday, as it seeks to meet rampant demand for computer chips.

Intel shares were up more than 1% during premarket trading. Tower Semiconductor shares were up more than 36%.

The deal will give Intel a stronger foothold in specialty technologies in which Tower Semiconductor works, like radio frequency and industrial sensors. Intel also said Tower’s existing production facilities are “geographically complementary,” with a presence in the U.S. and Asia.

And it’s a continuation of CEO Pat Gelsinger’s strategy of making massive investments to boost production.

Intel has been working to meet the large global demand for chips, which has caused an ongoing shortage, in part by announcing in January an up to $100 billion investment in what could become the world’s largest chip production complex in Ohio.

“First, we have to invest to catch up,” he said during the company’s Q4 earnings call in January. “We’re behind on capacity, you know, we would lust after having some free capacity today,” he added. Gelsinger took over as CEO a year ago.

Intel will pay $53 per share, exceeding its last closing price of $33.13 on Monday. They expect the deal to close in about 12 months.

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