Intel’s CEO makes trip to see Chinese regulator over Tower
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Pat Gelsinger, CEO of Intel, has gone to China to try and persuade the regulator there to approve his company’s takeover of foundry Tower Semiconductor Ltd. (Migdal Haemek, Israel), according to reports.
Intel announced a US$5.4 billion plan to acquire Tower at $53 per share in mid-February 2022, saying it expected to close the deal within about 12 months, subject to regulatory approvals. It was widely seen as a good way for Intel to gain foundry market share and absorb foundry know-how and business culture.
As such the deal is crucial to Gelsinger’s strategy for Intel which is intended to separate chip product development and sales from chip manufacturing. However, the Chinese regulator has not signed off on the deal for which the termination deadline is August 15.
The Chinese regulator has withheld approval on major semiconductor deals before; most notably on the planned takeover of NXP Semiconductors by Qualcomm in 2018 (see Qualcomm terminates NXP acquisition). Since then US-China relations have become increasingly strained over a series of export control limitations on technology imposed by the US.
Gelsinger arrived in China on Monday and will stay until Thursday and he is likely to visit with China’s antitrust regulator, the State Administration for Market Regulation, according to the Seeking Alpha report. The report added that Intel had confirmed Gelsinger’s visit to China.
It is the second such visit in recent months an indication of the importance of the deal to Intel.
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News articles:
Intel acknowledges Tower takeover delay
Intel set to buy foundry Tower for $5.4 billion
Intel is on track to regain chip manufacturing lead, says executive
Qualcomm terminates NXP acquisition
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