Intel has announced the termination of its planned acquisition of Israeli chipmaker Tower Semiconductor, citing the inability to obtain the required regulatory approvals in a timely manner. The tech giant had announced its intentions to acquire Tower Semiconductor in February 2022 for $5.4 billion. As a result of the failed deal, Intel will pay a termination fee of $353 million to Tower Semiconductor.

The termination of the acquisition deal comes as a setback for Intel, which has been working to boost its foundry business under the leadership of CEO Pat Gelsinger. The deal with Tower Semiconductor would have given Intel a foothold in specialty technologies such as radio frequency and industrial sensors. These areas are of strategic importance as Intel seeks to catch up to competitors like TSMC and Samsung in the chipmaking industry.

The regulatory approval failure highlights the challenges faced by businesses in navigating the complex and evolving landscape of international technology regulations, particularly between the U.S. and China. The semiconductor industry has been at the center of this battle, with export restrictions and regulatory barriers affecting global supply chains and business deals.

This development underscores the critical role of regulatory approvals and geopolitical considerations in shaping the technology industry’s landscape and the strategic decisions of major players like Intel.