Intel cancels $5.4 billion tower deal without Chinese approval

(Bloomberg) — Intel is expected to cancel its planned $5.4 billion acquisition of Tower Semiconductor Ltd. With time running out to win regulatory approval, according to people familiar with the matter.

Most Read from Bloomberg

The deadline for the deal, announced in early 2022, is midnight California time on August 15, said the people, who asked not to be identified because the details are private, and the companies don’t expect to get approval from China by then.

A representative for Intel declined to comment on the approaching deadline, while Tower did not immediately respond to a request for comment.

The purchase of the Israeli company was part of Intel CEO Pat Gelsinger’s plan to enter a faster-growing segment of the semiconductor industry, the foundry market dominated by Taiwan Semiconductor Manufacturing Co. The companies make chips for customers on a contract basis — but they have expertise and customers that Intel lacks.

Read more: Intel Buys Israeli Semiconductor Tower for $5.4 Billion

Investors had already reduced the chances of the deal going through. Tower’s US-traded shares are down 22% this year, even as stocks in the semiconductor industry have gained. It closed on Tuesday at $33.78 — well below the $53 per share offered by Intel.

Stacy Rasgon, an analyst at Sanford C. Bernstein, said the deal’s failure wouldn’t be a huge surprise given Tower’s share price drop, but it would be a setback for Intel.

“The failed deal seems somewhat disappointing for the prospects for Intel’s foundry effort,” he wrote in a research note after the Bloomberg story. “Overall, Intel’s foundry effort will never be easy even with Tower, but now it may be more difficult without it.”

When the deal was first announced in February last year, Intel said it would take “about 12 months.” Starting in October, the chip maker said it was targeting the first quarter of 2023, but warned in March that the date could be pushed back into the second quarter.

Rising tensions between China and the United States have made it difficult to get approval for transactions that require approval from regulators in Beijing and Washington, particularly when deals involve semiconductors, a key area of ​​friction.

Tower is a fraction of the size of Intel and TSMC in terms of revenue, but it makes components for big clients like Broadcom Inc. Intel’s plan was to merge the factories with Tower and take advantage of its client list. Although tower-shaped chips do not require the modern production technologies that an Intel or Nvidia Corp. processor requires, they do serve growing markets such as electric vehicles.

— with assistance from Peter Elstrom.

(Updates with analyst comment from sixth paragraph)

Most Read from Bloomberg Businessweek

© 2023 Bloomberg LP

Related Posts

Have You Seen How Kate Middleton Looked Before Her Marriage to Prince William? Check it Here!

We’re accustomed to seeing Kate Middleton as exceptionally slender and resonant, a picture of grace and elegance, particularly remembered for her radiant appearance at her wedding to Prince William. Despite…

Read more

Important reason why there are black dots on your car’s windscreen – you had better know what it means

The black dots, called a “marvel of engineering” by experts, are often overlooked, They are part of the frit band, a rough-textured enamel paint strip that frames the windshield’s edge….

Read more

Take a Seat, This Viral Cow Math Puzzle Will Take Your Brain for a Ride

fresh cow math puzzle is currently causing quite the stir on Twitter, leaving many scratching their heads—including myself. We’ve seen our fair share of monkey-themed brain teasers and riddles involving…

Read more

My 14-Year-Old Daughter Found a Pacifier in My Husband’s Briefcase — the Shocking Truth Almost Destroyed Me

When Jen’s daughter discovered a mysterious baby’s pacifier hidden in her husband’s briefcase, it unraveled a trail of secrets that led to surprising revelations, ultimately transforming their family in ways…

Read more

Homeless couple receives backlash for saying employment is not for them

This homeless couple’s decision to reject traditional work and opt for a tent lifestyle has sparked controversy and drawn criticism from all around. “Homelessness isn’t wrong if you’re looking at…

Read more

How To Make Old-School Creamy Pea Salad

There are certain recipes that never fail to bring about a wave of nostalgia for my childhood. Some of those recipes include my grandmother’s tomato sauce, banana bread, and creamy…

Read more

Leave a Reply

Your email address will not be published. Required fields are marked *