Tower Semiconductor Falls Prey to US-China Tensions, Stock Plunges

Tower Semiconductor Ltd TSEM is trading lower Wednesday after it mutually agreed with Intel Corp INTC to terminate its takeover pending regulatory approval.​ 

Intel will pay a termination fee of $353 million to Tower.

On February 15, Intel agreed to acquire Tower Semiconductor at a 60% premium. 

In May, Tower Semiconductor reported a first-quarter FY23 revenue decline of 15.6% year-on-year to $355.6 million, beating the consensus of $352.4 million. EPS of $0.64 beat the consensus of $0.47.

Reports suggested that the deal expired due to a lack of regulatory approval from China.

China's move reflects escalating geopolitical tensions with the U.S., which led to an additional embargo on China's access to artificial intelligence technology.

Previously the Nvidia Corp NVDA and Softbank Group Corp SFTBY SFTBF owned Arm Ltd deal fell prey to regulatory opposition.

Price Action: TSEM shares traded lower by 10.40% at $30.27 premarket on the last check Wednesday.