Intel Terminates Plan To Buy Tower Semiconductor

Intel has dropped its planned $5.4 billion acquisition of Israel's Tower Semiconductor. It's a setback to Intel's plans to expand its chip-manufacturing business. From a report: Intel said Wednesday the deal, originally agreed in 2022, had been terminated due to delays in getting regulatory approval. Chinese regulators hadn't approved the deal by Tuesday's deadline. Intel will now have to pay a $353 million termination fee to Tower Semiconductor. However, the more painful consequence could be the blow to Intel's plans to build up its business making chips on contract for others via its Foundry Services unit.

Outplayed

[The Evil Atheist]

At least in this instance, the CCP has outplayed the US. How is it even possible the CCP can basically dictate what a Western company can do? And all this in the midst of the US trying to gain dominance with embargos on semiconductor technology?

Re: Outplayed

[spinitch]

EU has more clout. If have a big market then anti trust approvals are a consideration. Tower SC is not worth jeopardizing Intels broader business in China. Yes Curious Coincidence on the way US has restricted select China business. China just dragging feet but it is costly per the bid to acquire, so Intel giving up. Perhaps takes it as a hint.

Re:

[jslolam]

Letting the camel's nose in the tent... ironic considering where this is happening.

Re:

[toxonix]

The more we globalize or just do business with China in general, the more hooks the CCP can put into companies. This is the perfect example. The only business I'd want to do with China is selling them cooking oil.

Re:

[AmiMoJo]

Intel employs over 12,000 people in China, with revenues of $17 billion.

Just like the EU, if you want to do business there, you get regulated. Microsoft and Activision Blizzard are both US companies, but the EU and even the UK regulators have to approve their merger because they have substantial business interests there.

This may be retaliation against the US for the sanctions. It certainly hurts Intel and slows their ability to develop cutting edge fabs. How does it affect the Israeli company? Is Israel fol

Re:

[redmid17]

How did this get modded as insightful?

Re:

[The Evil Atheist]

More importantly, why can't a bunch of nerds recognize a rhetorical question?

Because Intel makes more money in China

[waspleg]

than in the US. Read their 10Ks.

I have to ask this question.

[TomGreenhaw]

Why would Intel need China's permission to buy an Israeli company? If Tower operates in China, that would be reason enough for Intel to call off the deal. With new US subsidies, Intel is way better off building its own in the US.

Re:I have to ask this question.

[gweihir]

Anti-Trust. If the Chinese regulator does not agree, it can fine Intel into the ground in China or kill all of its business directly. Same in any large regulated market, this is in no way special. Just look at who all has to agree, for example, to MS trying to buy Activision-Blizzard.

Re:

[AmiMoJo]

It's not just that Intel has over 12,000 employees in China, you can imagine a ban on importing Intel chips could destroy their business overnight. Most laptops and I imagine a decent proportion of desktops are made in China, and suddenly AMD would be the only supplier.

A couple of Chinese companies are producing x86 chips too. They are using the licence that was granted to VIA, many years ago. They are mediocre at the moment, but improving. At least one company is offering GPUs as well, still very limited s

Re:

[gweihir]

Exactly. The only reason this question even shows up is that the US has really pathetic and problematic anti-trust practices and hence most US citizens do not understand why anti-trust is essential to keep a market functional.

Re:

[nicubunu]

Why would Intel need China's permission to buy an Israeli company?

Why China needs US permission to buy machinery from The Netherlands? (I am talking about ASML)

How much would it have cost to pull out of China?

[sabbede]

If it would have cost Intel less than a third of a billion, then that's what they should have done. They should do it anyway, along with suing the CCP for costing them hundreds of millions through intentional nonfeasance.

I'm also a bit suspicious as to what they may be buying from Tower, which isn't subject to US trade restrictions so long as Intel doesn't own them.