Intel Corp. has entered into a definitive agreement to acquire Tower Semiconductor in a deal valued at $5.4 billion.

Under the agreement, Intel will acquire Tower for $53 a share in cash.

The deal will give Intel’s IDM 2.0 strategy to expand worldwide – along with its manufacturing capacity and technology portfolio – a significant boost.

Intel has a plant in Rio Rancho that employs about 2,000 and plans to add another 700 employees as part of a $3.5 billion expansion. It is the only leading-edge player with research and development and manufacturing in the U.S., including recently announced expansions in Arizona and New Mexico, and plans to build a new mega-site in Ohio.

As a key part of its IDM 2.0 strategy, Intel established Intel Foundry Services in March 2021 to help meet the growing global demand for semiconductor manufacturing capacity and to become a major provider of U.S.- and Europe-based foundry capacity to serve customers worldwide.

IFS offers leading-edge process and packaging technology, committed capacity in the U.S. and Europe, and plans to expand.

Tower’s “specialty technology portfolio, geographic reach, deep customer relationships and services-first operations will help scale Intel’s foundry services and advance our goal of becoming a major provider of foundry capacity globally,” said Pat Gelsinger, Intel CEO, in a press release.

The acquisition will unlock “new opportunities for existing and future customers in an era of unprecedented demand for semiconductors,” he said.