Wednesday, October 23, 2019
M&A Deals Rebound in Global Semiconductor Industry
Companies Scrambling for Next-generation Technologies
M&A Deals Rebound in Global Semiconductor Industry
  • By Michael Herh
  • September 20, 2019, 11:08
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The global semiconductor industry is expected to see an increase in M&A deals this year after a downturn for the past three years. M&A activities are expected to be brisk for the time being as companies are scrambling to secure next-generation technologies such as 5G and semiconductors for self-driving vehicles.

About 20 major M&A contracts totaling US$28 billion have been signed in the global semiconductor industry from January to August this year, said IC Insights, a market researcher, on Sept. 19.

This already eclipsed the US$25.9 billion posted for the whole of last year and is close to that of 2017 US$28.1 billion, which was the third largest in history.

IC Insights said that this year, M​&As increased significantly thanks to many deals in the networking and wireless sectors, which are expected to grow rapidly, and restructurings by some large companies.

Major deals included Intel's decision in July to sell off its smartphone modem business to Apple for about US$1 billion and a decision by Marvell of the United States in May to sell off its wireless LAN business to NXP Semiconductors of the Netherlands.

"It's hard to predict how many more M&A deals will be made in the rest of this year, but it's certain that they will outnumber those of 2017," IC Insights said. The most active year of M&As in the global semiconductor industry was 2015 when M&A deals amounted to US$107.3 billion. The following year, the figure reached US$104 billion, but some deals were canceled, lowering the final tally to US$59.8 billion.

"An M&A war is continuing because semiconductor technology is vital to securing such next-generation technologies as AI and 5G communications," said an official of the semiconductor industry. “There is a possibility that the M&A war may escalate if the memory semiconductor market recovers."