According to news on August 17, on Wednesday local time, Intel announced that it had terminated the acquisition of Tower Semiconductor, an Israeli semiconductor foundry because it could not obtain the regulatory approval required by the merger agreement in time.
Under the terms of the merger agreement, Intel will pay High Tower Semiconductor a termination fee of $353 million, which fully offsets the $232 million in revenue earned by the Intel Foundry Services (IFS) segment in the second quarter of 2023.
Founded in 1993 and headquartered in Israel, High Tower Semiconductor is a purely independent professional foundry dedicated to semiconductor manufacturing. The company mainly manufactures semiconductors for customers based on customer designs or other third-party designs.
While Tower Semiconductor is small compared to market leader TSMC, it has a wealth of experience and customers, which is a boon for Intel.
On February 15, 2022, Intel announced that it would acquire Tower Semiconductor for $5.4 billion. Initially, the deal was expected to close within a year, but the deadline was extended twice.
Dubbed a “highly complementary transaction” when the acquisition was first announced, the deal will play a key role in Intel’s plan to become a major supplier of foundry services and semiconductor manufacturing capabilities around the world.
Like many merger deals, the deal requires approval from various regulators around the world, including in China. Ultimately, however, the deal was terminated due to regulatory hurdles. The proposed deal is understood to have been approved everywhere except China. After the deal with Intel fell through, shares of High Tower Semiconductor began to slide.