Intel on Wednesday declared an end to its merger with Israeli chipmaker Tower Semiconductor, stating that it had not received the necessary regulatory approval. The American chipmaker is to pay a compensation fee of $353 million to Tower. Back in February 2022, Intel expressed their intent to buy Tower for $5.4 billion. Tower, a contractor chipmaker, is responsible for manufacturing semiconductors for other companies.
Intel on Wednesday declared the conclusion of their acquisition of Tower Semiconductor, attributing the failure to acquire regulatory permission. In a statement, the tech giant mentioned that due to the lack of timely receipt of necessary regulatory approvals, they have decided to call off their long-anticipated merger. Intel will consequently pay Tower a termination fee of $353 million. In February 2022, Intel made plans to buy Tower, a contract chipmaker for 5.4 billion. Tower Semiconductor shares, traded at the Tel Aviv Stock Exchange, slumped 8% during the early hours of Thursday. People with knowledge of the situation reported to Reuters that Intel did not get approval from the Chinese authorities before the expiration of the deadline. Chinese regulators have not made public any notice of the purchase being approved. Tower Semiconductor announced in a statement Wednesday that after careful reflection, both parties agreed to annul their merger agreement, having crossed the outside date of August 15, 2023.
The end of the transaction could be harmful for Intel. Under Gelsinger, the corporation has declared its intent to increase its foundry services. Foundries refer to organizations that assemble semiconductors. Over the last few years, Intel's hegemony in chipmaking has been eclipsed by Taiwanese company TSMC and Samsung of South Korea, leaving them trying to recover. The operation would have enabled Intel to get a grip on the niche technologies which Tower focuses on, such as radio frequencies and industrial sensors. Intel is seen as essential in the attempt of the US to win back supremacy in semiconductor production.The abandonment of the procurement further demonstrates the way that company deals keep on getting stuck in the wider technology struggle between the US and China, with semiconductors at the focal point. The US has used export constraints in an effort to seclude China from key semiconductor technology. China has barred the export of some metals that are needed in chipmaking as well as other technology. Beijing also forbade some entities in China from getting products from the American memory chip company Micron.
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