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UPDATE 1-Applied Materials terminates $2.2 bln deal for Japan's Kokusai Electric

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(Adds background, termination fee)

March 29 (Reuters) - Applied Materials has terminated its $2.2-billion deal to buy Japanese peer Kokusai Electric Corp from KKR & Co, the chip equipment maker said on Monday as it did not get a confirmation of timely approval from China's regulator.

The termination comes as trade relations between the United States and China become increasingly strained.

Applied Materials had entered the deal in 2019, betting on a rise in demand for memory chips used in data centers, 5G phones and AI-powered devices. (https://reut.rs/2P8IKfO)

The chip gear maker had said the deal did not require the approval of U.S. Justice Department, which had forced the company to scrap its $10 billion takeover of Japan's Tokyo Electron Ltd in 2015.

Applied will pay a termination fee of $154 million in cash to KKR HKE Investment for the deal that was annulled on Mar. 19. (https://refini.tv/31wmH5b) (Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur)