Intel scraps plans of buying Tower Semiconductor: find out more

August 17, 2023 09:09 AM AEST | By Invezz

Intel scraps plans of buying Tower Semiconductor: find out more — Image source: Invezz

Why did Intel terminate the Tower deal today?

The California-based multinational decided to abandon the acquisition after failing to receive regulatory approval from China amid souring Sino-U.S. relations.

It will now have to pay $353 million in termination fee to the Israeli chipmaker. Pat Gelsinger – the Chief Executive of Intel said today in a press release:

Our respect for Tower has only grown through this process and we will continue to look for opportunities to work together in the future.

Last month, the semiconductor behemoth recorded a surprise profit for its fiscal second quarter as Invezz reported here. Its shares are up 25% versus the start of this year at writing.

Intel wants to expand its foundry business

Intel had first revealed interest in buying Tower Semiconductor in February of 2022.

The announcement this morning is a potential setback for the New York listed firm as it hurts its plans of expanding in the foundry business. CEO Gelsinger also said on Wednesday:

Our foundry efforts are critical to unlocking the full potential of IDM 2.0, and we continue to drive forward on all facets of our strategy.

Note that Intel Corporation that the street currently rates at “hold” is pivotal to the United States’ push to onshore semiconductor manufacturing. Revenue from its foundry business shot up a whopping 300% year-on-year in the second quarter of this year.

The post Intel scraps plans of buying Tower Semiconductor: find out more appeared first on Invezz.

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