HONG KONG (AP) — Intel will terminate a $5.4 billion deal to accumulate Israeli chip producer Tower Semiconductor after China didn't log off on the deal amid rising tensions with the United States.

It was a mutual determination between Intel and Tower, the businesses stated Wednesday. Intel stated that the deal was terminated “due to the inability to obtain in a timely manner the regulatory approvals required under the merger agreement.”

Intel Corp. can pay Tower a termination price of $353 million, the U.S. semiconductor big stated.

The deal required regulatory approval from a number of regulators worldwide together with China, however Chinese regulators didn't greenlight the deal by the Aug. 15 transaction deadline, even after Intel CEO Patrick Gelsinger traveled to China final month in a bid to win them over.

The scuttled deal between the 2 firms comes amid rising U.S.-China tensions, notably because the U.S. has tightened export controls and imposed restrictions aimed toward crippling China’s capability to buy and manufacture superior chips.

In response, China’s antitrust regulator, the State Administration for Market Regulation, seems to have dragged its ft on approving mergers involving American firms, such because the Intel-Tower deal.

Intel initially aimed to shut the deal by the primary quarter of the 12 months, however later prolonged the deadline after it didn't obtain approval from China. Intel hoped that its acquisition of Tower would develop its manufacturing capability and open up development alternatives for the agency in U.S., Israel, Italy and Japan.

Tower’s inventory worth fell greater than 11% in pre-market buying and selling within the U.S. The firm’s inventory worth in Tel Aviv additionally plunged over 10%.

“Tower was very excited to join Intel to enable Pat Gelsinger’s vision for Intel’s foundry business,” stated Russell Ellwanger, Tower Semiconductor’s CEO in a press release. “We appreciate the efforts by all parties.”

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