China torpedoes Intel's bid to buy Tower Semiconductor

Intel scrapped its more-than-$5 billion offer to buy Israeli chip maker Tower Semiconductor after Chinese regulators failed to approve the deal in time, the latest sign of fallout from the U.S.-China battle over technology.

- Dan Strumpf

Intel and Tower said on Wednesday they would walk away from their proposed deal after failing to win regulatory approval. Neither company cited China, but Intel had said the deal might fall through if regulatory approval wasn't received by a Tuesday deadline. China's State Administration for Market Regulation, which has yet to sign off on the deal, didn't respond to a request for comment Wednesday.

The demise of the deal comes as the Biden administration ratchets up pressure on China's chip industry in an effort to curb its military. The U.S. unveiled sweeping export controls on sharing American chip technology with China in October, and recently announced restrictions on investment in China's chip sector.

Antitrust reviews have become a part of Beijing's tool kit for hitting back at the U.S., with regulators slow-walking or failing to approve deals involving American companies that fall within its jurisdiction.

Large-scale global acquisitions commonly need the endorsement of a number of regulatory bodies across major markets. In China, a merger triggers an antitrust review if two companies in a deal have annual revenue of more than $117 million from the country.