The M & A boom in the semiconductor industry peaked in 2015 with a total value of $ 107.7 billion. However, in the following three years, the total amount of mergers and acquisitions has continued to decline. In 2019, the semiconductor market has slowed down, and mergers and acquisitions have become active. IC Insights pointed out in its latest 2020 edition of the “McClean Report” that there are more than 30 semiconductor acquisitions in 2019 with a total value of $ 31.7 billion, a 22% increase from 2018's $ 25.9 billion, but still far behind 2015 -2016 highs.
According to IC Insights analysis, the growth of M & A agreements in 2019 is mainly driven by M & A transactions of network and wireless connectivity ICs and the transformation of semiconductor supplier business. Semiconductor suppliers are expected to add new automotive applications and other high-growth markets in the next decade. Emerging fields such as products, 5G, AI, and automotive have successively achieved commercial mass production. While creating high-growth market demand, it has also helped the gradual recovery of mergers and acquisitions in the semiconductor field.
In addition, the 2019 M & A transaction also includes business cuts in some companies, such as Intel selling its mobile modem business to Apple, and Marvell announced the sale of its Wi-Fi connection business to NXP for $ 1.7 billion.
According to the IC Insights report analysis, since 2015, as the chip industry's integration pace has accelerated, in order to enhance technology and product capabilities, the vitality of semiconductor acquisitions has risen to a new level. The current total acquisitions remain at $ 25- $ 30 billion per year, involving areas Including machine learning / artificial intelligence, autonomous driving, biometrics, computer vision, VR / AR, and the Internet of Things.
Market consulting company Accenture also released a report in January that the traditional organic growth of the semiconductor industry has ended: rising research and development costs, the speed of technological iterations, and diversified customer needs have all compressed the time and funds that have supported organic growth in semiconductor companies in the past; as an alternative Leading semiconductor manufacturers have adopted M & A as a new growth strategy, and as a result, the industry has been violently integrated. According to statistics: there were 130 semiconductor companies with a market value of more than 100 million US dollars listed in the United States 10 years ago, and only 72 at the end of 2018.
At the same time, Accenture also pointed out that data showed that from 2013 to 2015, there were only three cases of semiconductor M & A transactions that were blocked or terminated due to factors such as "government intervention" or "regulatory restrictions"; but from 2016 to 2018, this number rose To 14 cases. This shows that the larger the scale of transactions today, the easier it is to encounter longer-term reviews, and stricter regulations are also a major uncertainty factor for the semiconductor industry's mergers and acquisitions.
In addition to policy supervision, trade relations may also be a significant factor in semiconductor acquisitions and acquisitions. Some experts have analyzed that Chinese semiconductor companies may face difficulties in the process of reviewing overseas mergers and acquisitions.
Regarding the potential impact of this new type of coronary pneumonia on semiconductor mergers and acquisitions, according to experts interviewed by the 21st Century Business Herald, the epidemic will slow down the growth of China's semiconductor industry to a certain extent. Many manufacturers' existing production increase and sales plans may face delays, and then delay M & A by Chinese manufacturers. On the other hand, the epidemic situation may also make it difficult for small and medium-sized enterprises to raise funds in the future, and it will also promote the merger of a number of small and medium-sized semiconductor companies. In general, the epidemic will change the layout of Chinese semiconductor companies to some extent.