Intel Drops Tower Semiconductor Acquisition Amid Regulatory Challenges
In early 2022, Intel, the tech giant, unveiled plans to acquire Israeli contract chip manufacturer Tower Semiconductor for a sum of $5.4 billion. However, since then, the deal has been undergoing regulatory approvals from various countries and regions, with China proving to be a major roadblock. As the approval process extended, it has now been revealed that Intel has chosen to abandon the acquisition altogether.
Reuters and Bloomberg shared this information today, relying on their exclusive sources for the data. Intel representatives have officially confirmed that the deal with Tower Semiconductor fell through due to the lack of approval from antitrust authorities. Reportedly, Intel will withdraw its intention to acquire Tower Semiconductor and will compensate the Israeli chip manufacturer with a penalty of $353 million. Initially, Intel’s primary motivation for the acquisition was gaining access to Tower Semiconductor’s client base, which could have facilitated the development of Intel’s contract chip manufacturing business. However, from a technological standpoint, Tower had little to offer Intel as the latter employs a more advanced lithography.
CEO Patrick Gelsinger played an active role in facilitating the deal, making two trips to China in the past few months to negotiate with officials responsible for antitrust regulations. Last month, the head of Intel stated that the company would continue to invest in its contract business’s growth, regardless of whether the Tower Semiconductor deal materialized. In response to the news, Tower Semiconductor’s stock prices plummeted to $34 per share, significantly lower than the deal’s proposed price of $53 per share.
Formally, Intel could have extended the deal’s review period, but recent reports indicate that they have chosen not to do so. This decision marks a setback for Intel as it seeks to expand its presence in the semiconductor market and navigate the ever-evolving landscape of technology acquisitions and regulatory challenges.
- I'm Vasyl Kolomiiets, a seasoned tech journalist regularly contributing to global publications. Having a profound background in information technologies, I seamlessly blended my technical expertise with my passion for writing, venturing into technology journalism. I've covered a wide range of topics including cutting-edge developments and their impacts on society, contributing to leading tech platforms.
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