Intel Corp officially called off the US$5.4 billion deal of Tower Semiconductor Inc. acquisition due to failure in obtaining approval from the Chinese authorities. The decision was announced on its website.
In accordance with the terms of the merger agreement and in connection with its termination, Intel will pay a termination fee of $353 million to Tower. Intel and Tower signed the deal in February 2022. They have already extended the deadline twice.
"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 Pat Gelsinger, CEO of Intel. "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. Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future."
Stuart Pann, senior vice president and general manager of Intel Foundry Services (IFS), said, "Since its launch in 2021, Intel Foundry Services has gained traction with customers and partners, and we have made significant advancements toward our goal of becoming the second-largest global external foundry by the end of the decade. We are building a differentiated customer value proposition as the world's first open system foundry, with the technology portfolio and manufacturing expertise that includes packaging, chiplet standards and software, going beyond traditional wafer manufacturing."
Intel said IFS has made significant strides over the past year as demonstrated by its more than 300% year-over-year revenue increase in the second quarter of 2023. This momentum is further illustrated by Intel’s recent agreement with Synopsys to develop a portfolio of intellectual property (IP) on Intel 3 and Intel 18A process nodes.
Eric Chen, DIGITIMES Research semiconductor analyst and project manager, pointed out that "Without Tower, IFS can only provide advanced node foundry services and is unable to complete the service portfolio proposed by Gelsinger."
Tower produces logic chips and RF SOI chips with 45 and 65 nm processing technology or at micron levels. It also produces CMOS image sensors, analog and power discrete chips with mature-node foundry services, catering to consumer, industrial, automotive, and mobile markets. Tower has fabs in Japan, Israel, Italy, California, and Texas.
