hit counter html code

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

King Charles ‘keener than ever’ to see Harry’s children

Prince Harry, who is said to have been missing his UK life, is more determined than ever to resolve the security issue that prevents him and Meghan…

JD Vance underwent surgery before being sworn in as VP

JD Vance’s journey to the White House is quite an astounding one. The 40-year-old, from Middletown, Ohio, shot to relative stardom when he released his memoir Hillbilly Elegy:…

Experts Warn That A Catastrophe That Would Kill Hundreds Of Thousands Of People Is Expected To Strike The US In 2032

In less than ten years, a catastrophe is expected to strike US hospitals, causing hundreds of thousands of people to die needlessly, according to experts. A thorough…

Spoiled teen mocked stewardess, not aware rich dad was watching

Andrew has always enjoyed a life of privilege. His father was a wealthy man who owned several businesses across New York and provided the perfect opportunities for…

A paper plane from my grandson uncovered my DIL’s secret and got me banned from seeing him

Following my husband’s passing, my world turned upside down. Living on my own at 71 wasn’t an easy thing to get used to. Only the thought of…

15 Cancer Causing Foods You Need to Avoid

Our diet plays a pivotal role in shaping our health, but certain cancer causing foods may increase the risk of developing serious illnesses. By understanding what these…

Leave a Reply

Your email address will not be published.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