Tower Semiconductor (NASDAQ:TSEM) stock is taking a beating on Wednesday after the company’s merger agreement with Intel (NASDAQ:INTC) was terminated.

The problem with the deal was Intel being unable to acquire regulatory approval from the Chinese government in a timely manner. As a result, the company has to pay a $353 million fee to Tower Semiconductor for abandoning the deal.

Intel was hoping to combine with Tower Semiconductor to expand its presence in China. While Tower Semiconductor is small compared to market leader Taiwan Semiconductor (NYSE:TSM), it has experience and customers that would have been a benefit to Intel.

Sanford C. Bernstein analyst Stacy Rasgon weighed in on the terminated deal with a note obtained by Bloomberg:

“A failed deal does seem modestly disappointing for the prospects of Intel’s foundry efforts […] Overall Intel’s foundry efforts were never going to be easy even with Tower, but now may prove to be even more challenging without.”

TSEM Stock Movement on Wednesday

Following news of the failed Intel deal, shares of TSEM stock are seeing heavy trading as investors sell them. That has more than 2.3 million units on the move as of this writing. For the record, the company’s daily average trading volume is about 984,000 shares.

For Intel, the failed deal has some 1 million shares on the move today. That’s far from its daily average trading volume of around 44 million shares.

TSEM stock is down 9.4% and INTC stock is down 1.3% as of Wednesday morning.

Investors can check out even more of the most recent stock market news below!

We’ve got all of the biggest stock market stories that traders need to know about on Wednesday. A few examples include why shares of AMC Entertainment (NYSE:AMC), Coinbase (NASDAQ:COIN) and Impel Pharmaceuticals (NASDAQ:IMPL) stock are on the move today. All of that news is ready to go at the following links!

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.