Tower Semiconductor (TSEM) shares fell more than 8% in early trading on Wednesday after Intel (INTC) called off a $5.4 billion deal to buy the Israeli chip maker, saying it wasn't able to secure regulatory approval for the deal from China in time. Shares of Intel were 1% lower.

Calling off the deal means Intel will 🐈have to pay a termination fee of $353 million ꦦto Tower, in accordance with the merger agreement signed last year.

Intel had announced its plans to acquire Tower, a leading foundry for analog semiconductors, last February to expand its manufacturing capacity, global footprint, and technology portfolio.

Though much smaller than Intel, Tower would have offered expertise in the mobile, automobile, and power segments, as well as geographic opportunities in Texas, Israel, Italy, and Japan.

However, tensions between China and the U.S. have made securing regulatory approval for transactions that need clearance from regulators in both countries harder for some companies, especially in the semiconductor industry, and Intel reportedly failed to obtain approval from Chinese regulators on time.

Despite Wednesday's losses, shares of Intel were still 29% higher year-to-date, while shares of Tower have lost 28% of their value this year.