Intel (Nasdaq: INTC) has decided to drop a $5.4 billion deal to buy Tower Semiconductor (Nasdaq: TSEM) after failing to secure the required regulatory clearances in a timely manner.
In February 2022, Intel agreed to pay $53 per share in cash to acquire Tower to establish an end-to-end foundry aimed at meeting the rising demand for semiconductors worldwide.
Intel CEO Pat Gelsinger said in a statement published Wednesday the Santa Clara, California-based company will continue to explore opportunities to work with Tower in the future.
“Our foundry efforts are critical to unlocking the full potential of IDM 2.0, and we continue to drive forward on all facets of our strategy,” said Gelsinger.
“We are executing well on our roadmap to regain transistor performance and power performance leadership by 2025, building momentum with customers and the broader ecosystem and investing to deliver the geographically diverse and resilient manufacturing footprint the world needs,” he added.
IDM 2.0 is Intel’s integrated device manufacturing strategy that intends to advance innovation and drive product leadership. The strategy is composed of three elements: the new Intel Foundry Services business unit, internal factory network and expanded use of third-party foundry capacity.
Established in 2021, IFS posted a year-over-year revenue hike of more than 300 percent in the second quarter of 2023.
As a result of the move, Tower will receive a termination fee of $353 million from Intel.
