The Intel Corporation on Wednesday announced that it had mutually agreed with Tower Semiconductor, an Israeli company that manufactures integrated circuits using specialty process technologies, to terminate its previously disclosed agreement to acquire Tower for $5.4 billion.
Intel pinned dropping the deal on “inability to obtain in a timely manner the regulatory approvals required under the merger agreement.” But Reuters reported that “the development underscores how tensions between the United States and China over issues including trade, intellectual property, and the future of Taiwan, are spilling over into corporate dealmaking, especially when it comes to technology companies.”
Intel will pay Tower a termination fee of $353 million.
“Our foundry efforts are critical to unlocking the full potential of IDM 2.0 (a major evolution of Intel’s integrated device manufacturing model – DI), and we continue to drive forward on all facets of our strategy,” said Intel CEO Pat Gelsinger. “We are executing well on our roadmap to regain transistor performance and power performance leadership by 2025, building momentum with customers and the broader ecosystem and investing to deliver the geographically diverse and resilient manufacturing footprint the world needs. Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future.”
According to Reuters, in 2022, DuPont De Nemours Inc was forced to drop its $5.2 billion deal to buy electronics materials maker Rogers Corp in Chandler, Arizona after delays in securing approval from Chinese regulators.
Tower Semiconductor was founded in 1993, with the acquisition of National Semiconductor’s 150mm wafer fabrication facility in Migdal Ha’emek, Israel. On February 15, 2022, Intel announced an agreement to acquire Tower Semiconductor for $5.4 billion.