Due to regulatory approval challenges in China, Intel Corporation and Tower Semiconductor have jointly chosen to halt their acquisition discussions. As a result, Intel will compensate Tower with a $353 million termination fee. Despite this setback, Intel remains committed to its foundry initiatives, Intel Foundry Services (IFS), and has expressed interest in potential future collaborations with Tower.
When Intel announced plans to take over Tower Semiconductor in February 2022, the deal made great strategic sense for its Intel Foundry Services division. Firstly, the company would gain seven fabs tailored to build products on specialized nodes. Secondly, IFS would gain dozens of specialty process technologies. Thirdly, IFS would acquire tens or hundreds of customers with long-term contracts. Fourthly, Intel would get many seasoned foundry industry veterans with vast experience in contract manufacturing of chips, something the company does not have. Finally, IFS would immediately find itself in the Top 10 foundries list should it absorb Tower Semiconductor.
