Tower Semiconductor (NASDAQ:TSEM) stock was priced 11% lower in Wednesday’s early transactions after Intel Corporation (NASDAQ:INTC) dropped its acquisition of the chip foundry.
Intel unexpectedly announced overnight it had axed the US$5.4 billion deal, agreed in late 2022, with unnamed sources close to the deal citing regulatory complications and potential integration challenges.
Walking away will be seen as a setback for Intel’s expansion in the current ‘semi-conductor race’, as sector rivals continue to scramble to meet the overwhelming demand for more compute as artificial intelligence, virtual reality, and crypto technologies have boomed in recent years.
Nonetheless, it is reported that growing antitrust concerns seemed to have overshadowed the perceived benefits of the deal which would have needed to clear a stringent regulatory environment in multiple jurisdictions.
At the same time, reports suggest that the subsequent integration of the businesses might have been more cumbersome than Intel initially estimated.
Intel stock was practically unmoved in early premarket dealing, priced at US$34.83 which values the chipmaker at just over US$145.6 billion.
Tower stock, meanwhile, was down US$3.84 or 11.3% changing hands at US$29.94 valuing the semiconductor stock at less than US$4 billion.