The move underscores how tensions between the US and China over trade, intellectual property and the future of Taiwan are spilling over into corporate dealmaking.
Intel Chief Executive Pat Gelsinger had said he was trying to get the Tower deal approved by Chinese regulators and had visited the country as recently as last month to meet with government officials.
But Gelsinger also said Intel was investing in its foundry business, which makes chips for other companies, irrespective of the Tower deal.Intel had agreed to spend $25 billionInvestors had given up hope on the Tower deal as a result. Tower's Nasdaq-listed shares ended trading at $33.78 on Tuesday, a steep discount to the $53 per share deal price.
In the second quarter, Intel's foundry business reported revenue of $232 million, up from $57 million a year earlier, as it made advances on rivals such as industry leader Taiwan Semiconductor Manufacturing CoThe rise in foundry sales came from "advanced packaging," a process in which Intel can combine pieces of chips made by another company to create a more powerful chip.
Demand for Intel's chips has cooled after two years of strong growth driven by remote work during the pandemic, leading the chipmaker to turn to cost cuts. It has committed to trimming $3 billion in costs this year, with an aim of saving between $8 billion and $10 billion by the end of 2025. Reporting by Anirban Sen in New York; Additional reporting by Max Cherney in San Francisco; Editing by Jamie Freed
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