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

The deal required approval from a number of regulators worldwide, including those in China. Chinese regulators failed to approve the deal by a deadline Wednesday, even after Intel CEO Patrick Gelsinger traveled to China last month in a bid to win them over.

The scuttled deal between the two companies comes amid increasing U.S.-China tensions, particularly as the U.S. has tightened export controls and imposed restrictions aimed at crippling China’s ability to purchase and manufacture advanced chips.

In response, China’s antitrust regulator, the State Administration for Market Regulation, appears to have dragged its feet on approving mergers involving American companies, such as the Intel-Tower deal.

Last month, ahead of Treasury Secretary Janet Yellen’s visit to Beijing, China imposed export curbs on two metals used in computer chips and solar cells.

Intel originally aimed to close the deal by the first quarter of the year, but later extended the deadline after it failed to receive approval from China. Intel hoped that its acquisition of Tower would expand its manufacturing capacity and open up growth opportunities for the firm in U.S., Israel, Italy and Japan.

Intel Corp. will pay Tower a termination fee of $353 million, the U.S. semiconductor giant said.

Tower’s U.S. traded stock fell more than 9% at the opening bell and more than 10% in Tel Aviv.

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