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US-China tech rivalry hits Israel as Intel cancels Tower Semiconductor deal

The companies canceled the deal after failing to obtain regulatory approval from China.
A man types on a keyboard next to the Intel products for sale in Beijing, on April 08, 2008.

The US tech giant Intel announced on Wednesday the cancellation of its acquisition of the Israeli chipmaker Tower Semiconductor, demonstrating how the US-China technology rivalry is affecting Israel’s tech sector.

Intel said it mutually agreed with Tower Semiconductor to cancel the acquisition and will pay $353 million to the Israeli company. Tower Semiconductor said the two “received no indications regarding certain required regulatory approval” by the Tuesday deadline for the acquisition, according to statements from each firm.

Background: Intel is a Silicon Valley-based semiconductor chip manufacturer. Tower Semiconductor is based in northern Israel’s Migdal HaEmek and likewise makes semiconductor chips. These chips are electrical circuits that are widely used in computers, smartphones and related devices.

Intel agreed to purchase Tower Semiconductor last year in a $5.4 billion deal. Tower Semiconductor’s stock fell more than 10% by the close of trading on the Nasdaq on Wednesday, according to market data.

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