Intel Corp's $5.4 Billion Acquisition of Tower Semiconductor Falls Through
Intel Corp. is set to abandon its proposed $5.4 billion acquisition of Tower Semiconductor Inc. as it failed to obtain regulatory approval from China, according to Bloomberg News.
Approval Deadline Looms
The deadline for the deal is midnight on Tuesday, and with China unlikely to grant its approval in the final hours, Intel will most likely call off the acquisition.
CEO's Expansion Plans
Intel initially announced the deal to acquire the Israeli chip maker in February 2022. This was seen as part of Chief Executive Pat Gelsinger's strategy to enhance Intel's chip-manufacturing capabilities.
Impending Collapse
The collapse of the deal has been expected, with completion constantly postponed. As a result, U.S.-traded shares of Tower Semiconductor (TSEM) have dropped by 22% year-to-date, despite significant gains in the wider semiconductor industry.
Market Performance
In contrast, Intel shares (INTC) have soared by 32% in 2023, while the PHLX Semiconductor Index (SOX) has experienced a remarkable 40% surge this year.
Tower Semiconductor's Operations
Tower Semiconductor caters to various markets, including consumer, industrial, automotive, and mobile. The company operates manufacturing facilities—referred to as "fabs" within the industry—in Israel, Italy, California, and Texas.
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