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OCBJ INSIDER

Intel Corp.’s planned $5.4 billion purchase of Israeli-based chipmaker Tower Semiconductor, announced Feb. 15, is expected to help expand the Santa Clara tech giant’s foundry business, which makes chips for other firms.

How Tower’s Newport Beach operations, long home to hundreds of workers, fit into that plan remains to be seen. The company’s site just off Jamboree Road is expected to eventually be converted to residential uses—and that could take place sooner than previously expected, depending on how ongoing litigation plays out.

Tower’s building at 4321 Jamboree Road holds a roughly 320,000-square-foot wafer chip fabrication facility near the Newport Beach-Irvine city line. It’s been used by the chipmaker for years under various ownership structures and names, including Jazz Semiconductor and TowerJazz.

The building is owned by an affiliate of Irvine-based developer Shopoff Realty Investments, which bought it and several adjacent parcels, totaling about 25 acres, in 2014 for what’s now the Uptown Newport housing project.

What now holds Tower’s facilities is earmarked for the last construction phase at the ongoing, $1.25 billion development.

Four years ago, Shopoff kicked off litigation against the chipmaker, claiming it had violated noise abatement terms set during its last lease extension for the property, which was originally expected to run through 2027. Tower disputes the claims.

Litigation continues: CEO and President Bill Shopoff tells the Business Journal that a March trial is currently on the docket.

“We believe the lease terminates March 2022, however Tower thinks they have the right to an option to March 2027,” Shopoff says.

Even if the court rules in favor of the 2027 extension, “it is pretty short term for their business,” says Shopoff, who notes that home sales have been strong for the latest phase of Uptown Newport, the Parkhouse Residences. The luxe condo project has units starting around $2 million, with some units topping $4 million.

For more on the Intel-Tower plans, see Kevin Costelloe’s report on page 6.

Rivian Automotive Inc. works with over 400 suppliers that provide the EV upstart nearly 2,000 components.

Suppliers of semiconductors, very much in demand by all automakers, are among the most closely watched, chairman and CEO RJ Scaringe says.

Rivian is spending an abundance of time with its chip suppliers, building relationships that are expected to help the nearly $60 billion-valued company (Nasdaq: RIVN) get bigger allocations of chips going forward, Scaringe said last Thursday during an online event hosted by Wolfe Research.

For some types of chips used by automakers, there’s about 1.25 times the amount of demand compared to what’s being produced, while for other types of chips, demand is closer to 20 times what’s being produced, he said.

Chip shortages and other supply chain issues notwithstanding, “we’re absolutely making progress” at building the EV business, Scaringe said, noting that the company’s software-heavy systems gives it a leg up on other automakers in terms of being able to remotely tweak features and make operational upgrades.

Rather than vehicle depreciation, a Rivian vehicle “gets better every two weeks,” he says. “It improves with time.”

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