News Intel Abandons Tower Acquisition, Pays $353 Million Breakup Fee

[Admin]

Intel will not pursue acquisition of Tower Semiconductor following delay of Chinese review.

Intel Abandons Tower Acquisition, Pays $353 Million Breakup Fee : Read more

 

[-Fran-]

What was the reason a Company would need approval for a merger in certain territories? Because they do business there? Have representation? Shareholders/Owners are from that location? A bit of all of that?

Regards.

 

[rluker5]

China said no. Gelsinger didn't think he could fix that.
Could be for a couple of reasons. The net effect is the same either way. The US chip foundry business is worse off.

 

[EyadSoftwareEngineer]

China started producing it microchips locally, and stopped order of around 300 billion dollers from US companies, which serverlly effected US companies to reach the huge Chinese market.
China now is mass producing microchips with 28nm and above which is needed for 90% of the application.

 

[suryasans]

The cancellation of TowerSemi acquisition will have a good outcome for Intel. Intel can concentrate its foundry efforts for its customers' products that required a leading edge semiconductor processes, not legacy semiconductor processes like TowerSemi offerings.

 

[Deleted member 431422]

Where is Tower from, I mean country? It must have a significant impact on the industry for Intel to need a regulatory approval.

 

[peachpuff]

Where is Tower from, I mean country? It must have a significant impact on the industry for Intel to need a regulatory approval.

Isreal.

 

[PEnns]

Where is Tower from, I mean country? It must have a significant impact on the industry for Intel to need a regulatory approval.

It's in Israel

Tower

 

[samopa]

Intel in US and Tower in Israel, what that facts have to do with China ? Why China review matter ?

 

[thestryker]

The place this will hurt Intel the most is in 200mm wafer fabrication and the fact that they won't have the direct inroads to the wider fabrication market. Everything I've seen indicates spinning up new fabs that use 200mm wafers will basically never pay for themselves anymore.

Intel in US and Tower in Israel, what that facts have to do with China ? Why China review matter ?

From what I understand companies above a certain revenue threshold within mainland China are subject to review. There's a second threshold, but that is based on the business as a whole which Intel easily goes over. This means if they didn't get approval from China and went ahead they could no longer do business in the country.

 

[Deleted member 431422]

Intel in US and Tower in Israel, what that facts have to do with China ? Why China review matter ?

Both companies are in the same business sector. It's a common practice for market regulators to assess the effect the merger can have on economy. Especially if it can affect them.