China has torpedoed chip giant Intel’s plan to boost its manufacturing activity with a multibillion-dollar purchase of Israeli firm Tower Semiconductor. After the required approval from China’s competition watchdogs failed to reach the end of the targeted deadline for completion of the acquisition, Intel backed out of the deal. Tower will now receive a compensation of 353 million dollars (about 323 million euros).
There is currently a palpable dispute between the US and China over technological components. Washington wants to deny Beijing access to advanced technology in the field of chips and artificial intelligence as much as possible, while the People’s Republic responds with export bans on important raw materials. Major acquisitions worldwide also require the approval of the Chinese competition authorities.
Intel announced in February 2022 that it was looking to acquire Tower for $5.4 billion. Originally, approximately twelve months were planned for closing the deal.
Important building block for strategy
Intel boss Pat Gelsinger is currently working to establish the group as a manufacturer for other carriers and compete with the world’s largest chip contract manufacturer TSMC from Taiwan. Tower was an important part of this strategy. The Israeli company specializes in semiconductor products for cars and cameras, among other things, and would therefore have been an addition to Intel’s own factories.
Intel has been held back several times in recent years by new chip generations coming to market much later than announced due to development issues. Gelsinger promises to put the group back in charge with new production processes.
Intel, with its processors, is currently very dependent on the development of the PC market, which recently collapsed after the boom in the corona pandemic. When it comes to data center technology, Intel faces more competition from its smaller arch-rival AMD, as well as from graphics card specialist Nvidia, whose chips are particularly suited to artificial intelligence applications.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
