Signage exterior Intel headquarters in Santa Clara, California, Jan. 30, 2023.
David Paul Morris | Bloomberg | Getty Images
Intel on Wednesday terminated its acquisition of Israeli chipmaker Tower Semiconductor, saying it didn’t safe the required regulatory approval.
The tech big stated in an announcement it’s scrapping the deliberate deal “due to the inability to obtain in a timely manner the regulatory approvals required under the merger agreement.”
Intel can pay a termination price of $353 million to Tower.
Intel introduced intentions to purchase Tower — a contract chipmaker that manufactures semiconductors for different corporations — in February 2022 for $5.4 billion.
Tower Semiconductor’s Israel-listed shares have been down 8% round 4:18 a.m. ET.
Reuters, citing folks accustomed to the matter, reported Tuesday that Intel didn’t safe approval for the deal from the Chinese authorities earlier than a vital deadline handed. Chinese authorities haven’t publicly communicated approving the acquisition.
“After careful consideration and thorough discussions and having received no indications regarding certain required regulatory approval, both parties have agreed to terminate their merger agreement having passed the August 15, 2023 outside date,” Tower Semiconductor stated in an announcement Wednesday.
The termination of the deal is a possible blow to Intel which, beneath CEO Pat Gelsinger, has pledged to spice up its foundry business. Foundries confer with corporations that manufacture semiconductors.
Over the years, Intel misplaced its lead in chipmaking to Taiwanese agency TSMC and South Korea’s Samsung and is now attempting to catch up. The deal would have given Intel a foothold within the specialty applied sciences on which Tower focuses, like radio frequency and industrial sensors.
Intel is seen as crucial to the U.S. bid to regain management in semiconductor manufacturing.
The termination of the acquisition additionally highlights the way in which during which business offers proceed to get caught between the U.S. and China’s broader know-how battle, with semiconductors on the heart.
The U.S. has used export restrictions in a bid to chop China off from key semiconductor know-how. China has restricted export of sure metals required in chipmaking and different know-how. And Beijing additionally barred some entities in China from shopping for merchandise from U.S. reminiscence chip agency Micron.
Source: www.cnbc.com