The next move of Samsung Electronics is drawing much attention as M&As in the global semiconductor market are showing signs of acceleration. The company, which has more than 104 trillion won in cash, is concentrating on automotive components as one of its future growth drivers, which means it is likely to become more and more aggressive in M&As.
Market research firm IHS Markit reported on June 9 that Infineon Technologies can beat NXP to become the largest player in the global automotive semiconductor market once it acquires Cypress Semiconductor. Last year, Infineon Technologies represented 9.9 percent of the market with almost US$4.12 billion in sales while NXP reached slightly over US$4.50 billion and 10.8 percent.
According to the market research firm, Infineon Technologies’ market share rises to 11.9 percent once it takes over Cypress Semiconductor, which is the 14th-largest player with a market share of 1.9 percent and US$808 million in sales. The firm also said that the acquisition would expand Infineon’s business portfolio to automotive memory chips and WiFi.
The German semiconductor company announced on June 3 that it signed a contract with Cypress to acquire it for nine billion euros. Earlier, NXP took over the wireless LAN business unit of Marvell for US$1.76 billion in May.
M&As in the global semiconductor market are expected to be reinvigorated based on the recent contracts. Market research firm IC Insights recently reported that the size of the M&As dropped from US$107.3 billion to US$23.2 billion from 2015 to last year after Qualcomm’s acquisition of NXP failed.
The recent contracts are to take the lead in the fast-growing automotive semiconductor market, which is expected to grow 8 percent each year until 2025. With the overall semiconductor industry forecast to shrink 7.4 percent this year, the automotive semiconductor market is defying the downturn.
In the meantime, experts point out that Samsung Electronics needs to acquire an automotive semiconductor specialist in order to maximize its synergy with Harman International. “Samsung Electronics is likely to take over such firms once uncertainties are addressed with regard to the Samsung BioLogics accounting scandal and the 2016 South Korean political scandal,” one of them explained.