Semiconductor giant Qualcomm (QCOM) had been trying to acquire Dutch rival NXP for nearly two years, and it would have been the biggest merger in the history of the semiconductor industry.

Eight countries’ competition agencies had given Qualcomm the green light, but China’s State Administration for Market Regulation was dragging its feet, and at midnight New York time, the deal ran out the clock.

With the breakdown of the merger, Qualcomm will buy back as much as $30 billion in stock and pay NXP a $2 billion breakup fee. “We are still fans of the deal and the logic behind the deal,” Qualcomm CEO Steve Mollenkopf told Bloomberg.

NXP (NXPI) specializes in semiconductors essential to the auto industry and the Internet of Things. Qualcomm’s focus is on processors for mobile devices, and NXP was going to help it gain strength in the automotive market. Now Qualcomm will have to navigate its own way into the auto microchips, a market estimated to be worth just under $40 billion globally in 2016 and on track to grow to more than $51 billion in 2021.

Gartner estimates worldwide total semiconductor revenue will top $451 billion in 2018, up 7.5% from $419 billion in 2017. China’s refusal to approve the deal puts a “big red light on any big M&A in the semiconductor industry in the short term,” analyst Geoff Blaber told the Financial Times.

As recently as May, it had looked like the NXP deal was going to go through. But China’s ZTE (ZTCOY) was banned from buying U.S. components, such as Qualcomm semiconductors, after sidestepping sanctions in Iran. Donald Trump’s administration had said it could lift that ban if ZTE paid a $1.3 billion fine. This and the threat of punitive tariffs stuck in China’s craw. The American semiconductor industry is concerned that Trump’s China tariffs would have them paying import duties on their own products.

It’s been a tough year for Qualcomm. It got slapped with a fine from European Union competition authorities for its illegal payments to Apple (AAPL) to ensure rival chipmakers had no chance getting into the Cupertino company’s supply chain. The penalty was €997 million ($1.2 billion), 4.9% of its 2017 revenues. But the San Diego company just announced better-than-expected results for Q3, with revenues up 4% from last year.