Intel has announced that it has decided to walk away from a deal to acquire Israeli firm Tower Semiconductor for USD5.4 billion (~RM25 billion). This comes after it failed to get the necessary regulatory approvals in time.
In a statement by Intel, the tech giant revealed that it will be terminating an agreement to acquire Tower Semiconductor, and as such will be paying a termination fee of USD353 million to Tower. Intel had previously announced its intention to acquire Tower in February last year, with the terms of the deal stating that they had to get the deal done by 15 August 2023.
It’s understood that it was China that had not approved the deal; Intel CEO Pat Gelsinger had just only met with Chinese government officials last month to try and get the Tower deal done. One reason why China may have not approved the deal seems to be down to the rising tensions between China and the US, especially in the semiconductor industry. After news of the deal falling through, Tower’s shares suffered as much as 10%.
While Tower might not be a major player in the semiconductor industry, Intel wanted to acquire them for their expertise and customer base with Tower specialising in analog integrated circuits for various other companies such as Intel, Samsung and Broadcom. It would’ve been part of Intel and Gelsinger’s goal to expand Intel as a foundry and chipmaker for others.
Nevertheless, it appears that Gelsinger is still open to working with Tower in the future, stating that Intel’s respect for Tower has only grown during the acquisition process and that they’ll continue to look for opportunities to work together in the future. In any case, despite the failure to acquire Tower, Intel will continue to expand its foundry business too.
