When Intel announced its proposed acquisition of Tower Semiconductor for $5.4 billion in February 2022, it said it expected to complete the transaction within 12 months. However, more than 13 months after the announcement, the transaction has not been completed as it has not yet been approved by China’s State Administration of Market Regulation. However, Intel remains optimistic that he will take over Tower by the end of June.
As the first quarter draws to a close, Intel Israel released a statement this week that said the company will continue to work to complete the deal by the end of next week, but the deal will likely come later, i.e. sometime in the first half of the year. may not be settled until This year (until the end of June 2023).
Israeli biz portal We have quoted the full statement issued to Bloomberg.
“While we remain committed to closing the Tower transaction within the first quarter of 2023, the transaction could close in the first half of 2023, subject to certain regulatory approvals and customary closing conditions. ‘, the statement said.
Acquiring Tower Semiconductor will allow Intel to achieve multiple goals. First, acquire a semiconductor contract manufacturer with dozens of loyal customers and a steady revenue stream. This will be a good addition to the company’s existing IFS clients. The importance of mature nodes should not be underestimated. Third, acquire a seasoned executive team with extensive experience in contract chip manufacturing. This is what the company currently lacks.
Intel’s main issue with the Tower Semiconductor acquisition is the stance of China’s State Administration for Market Regulation (SAMR). Intel is seeking a grant from the US government’s CHIPS and Science Fund on the condition that it will not invest in China for 10 years after receipt. China, meanwhile, wants Intel to continue investing in Chinese assets and is trying to capitalize on this by potentially blocking deals.
Earlier this week, Intel appointed a veteran to lead the Intel Foundry Service division. It was widely believed that Intel was planning to appoint a Tower executive to the role after his Randhir Thakur stepped down in November, so the recent appointment could prove Intel too much to do with the outcome of the deal. It seemed to indicate a lack of confidence.
