Amidst Intel Acquisition, Tower Semiconductor Accused of IP Theft

Tower Semiconductor (TS), the Israeli semiconductor manufacturing specialist that's currently undergoing acquisition by Intel, has been accused of IP theft. Filed at the U.S. District Court in the Central District of California Southern Division by compound semiconductor wafer manufacturer IQE, the lawsuit alleges TS misappropriated the company's IP. The Cardiff-based IQE further says it has "significant evidence" supporting its accusations.

IQE's claims center on its porous silicon technology, which the company is currently bringing to market as a solution for power-switching devices in 5G telecoms and advanced sensing hardware. According to an IQE representative speaking to The Register, TS was awarded very specific related patents that are based on its own R&D efforts.

Damindu Jayaweera, a financial analyst at investment bank Peel Hunt, wrote in a note to investors that the "significant evidence" backing up IQE's claim includes breach of contract.

"We believe this relates to RF switching related Porous Silicon tech," he clarified, adding: "The technology in question could de-throne Soitec's RF-SOI dominance (worth c.$0.5bn annually)." Soitec is the current leading supplier for porous-based silicon manufacturing technologies.

Porous silicon is a form of silicon that substantially increases its surface-to-volume ratio by dispersing micropores throughout its structure. It features highly controllable characteristics and can be rendered "bio-inert", "bioactive" and "resorbable" according to the microspores' size. This opens up the door to several applications in gas, humidity, bio, and luminescent sensors.

In a statement shared on the company's website, IQE's Secretary and General Counsel, Tom Dale, said that Tower Semiconductor's alleged infringement undermines IQE's ability to compete and the significant resources it's invested in developing and patenting the technology.

"Our technology, processes and intellectual property are vital in underpinning IQE's products and solutions and in maintaining our market-leading position in advanced semiconductor materials. We will vigorously protect them and will provide further updates as material developments occur," he said.

Intel announced its acquisition of Tower Semiconductor in February. In announcing the deal, worth a cool $5.4 billion and expected to close by February 2023, Intel CEO Pat Gelsinger specifically referred to the company's "specialty technology portfolio". The lawsuit may now push sand through the deal's already moving gears.