Intel announced a deal to acquire Israel-based chipmaker Tower Semiconductor, a move designed to expand the US-company’s manufacturing capacity, global footprint and portfolio in response to rising demand.

In a statement, Intel explained it would pay $53 per share in cash, giving Tower Semiconductor a total enterprise value of $5.4 billion, with the deal expected to close in approximately 12 months subject to customary closing conditions.

Intel stated the deal significantly advanced its IDM 2.0 Strategy, which includes its Intel Foundry Services unit set up in March 2021 to “help meet the growing demand for semiconductor manufacturing capacity” and become a major provider of US- and Europe-based foundry capacity to serve customers globally.

Tower Semiconductor has expertise in a range of areas, said Intel, including radio frequency, power, silicon-germanium and industrial sensors among other areas, serving markets including mobile, automotive and power.

The company also fits Intel’s global ambitions, with Tower Semiconductor having a presence in the US, Asia, and parts of Europe including Israel and Italy.

Intel CEO Pat Gelsinger said Tower Semiconductor’s portfolio and geographic reach would help scale his company’s foundry services.

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

The proposed acquisition comes just a few months after Intel revealed it planned to spend €80 billion on new semiconductor facilities in Europe.