Tech Deal Doomed by DOJ Focus on Innovation

Lam Research Corp. and KLA Tencor Corp.’s abandonment of their deal due to antitrust issues underscores regulators’ growing concern that mergers in some industries can reduce innovation.

On Oct. 5, Lam Research announced it was withdrawing its $10.6 billion offer for rival chip-equipment maker KLA Tencor after the U.S. Department of Justice said the deal would harm competition.

“Innovation in the semiconductor industry is critically important to the American economy, and the proposed transaction presented concerns about the ability of the merged firm to foreclose competitors’ development of leading edge fabrication tools and process technology on a timely basis,” said ...