In early 2022, Intel announced its intention to buy Israeli contract chipmaker Tower Semiconductor for $5.4 billion. Since then, the deal has been approved by antitrust authorities of various countries and regions after stalling, in line with a bad tradition in China. The deadline for the deal was announced this week, and now insiders are saying Intel will pull out of the deal.
This information was shared today Reuters And Bloomberg, relative to their own channels for receiving data. Officials from both companies refrained from commenting at the time the news was being prepared for release. Intel is reportedly abandoning its intention to buy Tower Semiconductor by paying a $353 million penalty to the Israeli chipmaker. It is believed that Intel’s primary motive was to gain access to Tower Semiconductor’s customer base, which would allow the company to develop its own contract chip manufacturing operation. Technically, the Tower Intel had little to offer, since the latter uses a much more advanced lithography.
CEO Patrick Gelsinger was instrumental in facilitating the deal and has traveled to China twice in recent months to meet with antitrust officials. Last month, Intel’s chief said the company would continue to invest in developing its contract business, regardless of whether it could strike a deal to buy Tower Semiconductor. On the back of the related news, the price of the shares fell to $34 per share, well below the $53 per share price set in the deal. Intel could formally extend the terms of the transaction, but according to current data it will not do so.