Sources say Intel will abandon its $5.4 billion acquisition of Gaota Semiconductor and pay a $353 million breakup fee.

CTOnews.com, Aug. 16 (Reuters)-Intel will abandon its $5.4 billion acquisition of Israeli contract chipmaker Tower Semiconductor after its contract expires late Tuesday local time, according to Reuters.

Tuyuan Pexels Intel signed an agreement to buy Gaota Semiconductor in February 2022, but did not obtain approval from Chinese regulators as required by the contract. Intel does not intend to extend the contract, but will pay Gaota a $353 million break-up fee, according to people familiar with the matter.

It is reported that since China's State Administration of Market Supervision and Administration did not approve the deal on February 15, 2023, Intel and Gaota Semiconductor had previously announced an extension of the transaction period, extending the acquisition period to June 15, and then again to August 15. So far, China's State Administration of Market Supervision and Administration has not formally approved the deal.

Intel and Gaota declined to comment as of CTOnews.com.