- Intel, Tower terminate $5.4 bln deal over regulatory hurdles

By News Team, Rush Hour Daily

Updated on August 16th, 2023

intel,-tower-terminate-$5.4-bln-deal-over-regulatory-hurdles

Intel and Israeli contract chipmaker Tower Semiconductor have mutually terminated their proposed $5.4 billion deal due to a lack of timely regulatory approvals. The termination fee of $353 million will be paid by Intel to Tower Semiconductor. The companies did not provide specific details about the regulatory approvals. This development highlights the impact of tensions between the United States and China on corporate dealmaking, particularly in the technology sector. Similar delays in securing approval from Chinese regulators have been seen in other deals, such as DuPont De Nemours Inc’s scrapped $5.2 billion deal with Rogers Corp. Intel CEO Pat Gelsinger had been working to obtain Chinese regulatory approval for the Tower deal but also emphasized the company’s investment in its foundry business. In June, Intel announced a $25 billion investment in a new factory in Israel. Investors had already lost hope in the Tower deal, resulting in a significant drop in Tower’s share price. Intel’s foundry business reported increased revenue in the second quarter, driven by advancements in “advanced packaging.” Demand for Intel’s chips has cooled, leading the company to focus on cost cuts.