Signage exterior Intel headquarters in Santa Clara, California, Jan. 30, 2023.
David Paul Morris | Bloomberg | Getty Photos
Intel on Wednesday terminated its acquisition of Israeli chipmaker Tower Semiconductor, saying it did not safe the required regulatory approval.
The tech large stated in a press release it’s scrapping the deliberate deal “as a result of incapability to acquire in a well timed method the regulatory approvals required beneath the merger settlement.”
Intel pays a termination charge 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 acquainted with the matter, reported Tuesday that Intel didn’t safe approval for the deal from the Chinese language authorities earlier than the deadline handed. Chinese language authorities haven’t publicly communicated approving the acquisition.
“After cautious consideration and thorough discussions and having acquired no indications concerning sure required regulatory approval, each events have agreed to terminate their merger settlement having handed the August 15, 2023 exterior date,” Tower Semiconductor stated in a press release Wednesday.
The termination of the deal is a possible blow to Intel which, beneath CEO Pat Gelsinger, has pledged to spice up its foundry enterprise. Foundries discuss with corporations that manufacture semiconductors.
Over time, Intel misplaced its lead in chipmaking to Taiwanese agency TSMC and South Korea’s Samsung and is now making an attempt 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 important to the U.S. bid to regain management in semiconductor manufacturing.
The termination of the acquisition additionally highlights the way in which wherein enterprise offers proceed to get caught between the U.S. and China’s broader expertise battle, with semiconductors on the middle.
The U.S. has used export restrictions in a bid to chop China off from key semiconductor expertise. China has restricted export of sure metals required in chipmaking and different expertise. And Beijing additionally barred some entities in China from shopping for merchandise from U.S. reminiscence chip agency Micron.