4 things to know about the failed Intel/Tower Semiconductor deal

The two parties failed to obtain timely regulatory approvals

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Intel today announced it has abandoned plans to acquire Israeli contract chipmaker Tower Semiconductor, attributing the decision to the failure to obtain timely regulatory approvals required by the merger agreement.

Here are four key points:

• The acquisition was intended to strengthen Intel's contract chip-making business by expanding its manufacturing capacity, intellectual property, and global reach.

• Intel's CEO, Pat Gelsinger, had previously outlined a strategy called "IDM 2.0" which involved a multi-faceted approach to chip manufacturing, including its own factories, third-party factories, and foundry services.

• Intel's attempts to build relationships and gain regulatory approval in China, a significant market for the company, were insufficient to secure the deal.

• As a result, Intel will pay Tower Semiconductor a termination fee of $353 million (the initial deal previously announced on February 2022 amounted to $5.4 billion).