(Bloomberg) — Intel is expected to cancel its planned $5.4 billion acquisition of Tower Semiconductor Ltd. With time running out to win regulatory approval, according to people familiar with the matter.
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When the deal was first announced in February last year, Intel said it would take “about 12 months.” Starting in October, the chip maker said it was targeting the first quarter of 2023, but warned in March that the date could be pushed back into the second quarter.
Rising tensions between China and the United States have made it difficult to get approval for transactions that require approval from regulators in Beijing and Washington, particularly when deals involve semiconductors, a key area of friction.
Tower is a fraction of the size of Intel and TSMC in terms of revenue, but it makes components for big clients like Broadcom Inc. Intel’s plan was to merge the factories with Tower and take advantage of its client list. Although tower-shaped chips do not require the modern production technologies that an Intel or Nvidia Corp. processor requires, they do serve growing markets such as electric vehicles.
— with assistance from Peter Elstrom.
(Updates with analyst comment from sixth paragraph)
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