From The Verge: Intel has officially terminated its acquisition of Tower Semiconductor, the Israeli chipmaking company it announced its intention to buy for $5.4 billion in February 2022. In a press release Intel blamed its “inability to obtain… the regulatory approvals required under the merger agreement” in a timely manner, adding that both parties agreed to terminate the deal. Intel had originally hoped to close the transaction in 12 months, but will now pay a termination fee of $353 million to Tower.
Although Intel’s press release doesn’t mention the regulator directly, Bloomberg reports that it was the Chinese authorities who hadn’t approve the deal ahead of the transaction’s deadline at midnight California time on August 15th. Sure enough, Intel’s press release was published at two minutes past midnight PT. Increased US-China tensions in recent years, especially when it comes to the so-called “Chip War” over semiconductor manufacturing, have reportedly created challenges getting regulatory signoff on these kinds of acquisitions.
The failure of the deal will be seen as a setback for Intel’s fledgling Intel Foundry Service (IFS) division, which Intel hopes to build into a significant contract chip manufacturer to compete with rival TSMC. Although smaller than the likes of Intel and TSMC, Tower has expertise building specialized products like radio frequency (RF) chips, CMOS image sensors, and power management parts, and Bloomberg notes that it supplies large companies like Broadcom.
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