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M&As in Semiconductor Market Showing Signs of Rebounding
Attention Focusing on Samsung Electronics
M&As in Semiconductor Market Showing Signs of Rebounding
  • By Kim Eun-jin
  • February 14, 2020, 13:38
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M&As in the global semiconductor market are expected to increase with the development of IoT and AI technologies.

Mergers and acquisitions (M&As) in the global semiconductor market are expected to increase based on the development of IoT and AI technologies. Industry watchers are paying much attention to the future move of Samsung Electronics with the company aiming to top the global system semiconductor market within 10 years and the ongoing recovery of the global memory chip market expected to improve its financing conditions.

Last year, a total of seven M&As worth more than US$1 billion each were concluded in the global semiconductor market. The number is likely to increase this year.

Market research firm IC Insights said in its recent report that the total M&A value in the market reached US$31.7 billion last year, up 22.4 percent from a year ago and the third-largest behind those of 2015 (US$107.7 billion) and 2016 (US$59.8 billion). In 2019, Infineon took over Cypress Semiconductor for US$9.4 billion. The annual average M&A value in the market, which stood at US$12.6 billion in the period of 2010 to 2014, jumped to US$58.8 billion in the period of 2015 to 2019. According to IC Insights, this is because of an accelerated integration of the chip industry and transactions for new product and technology addition. “Especially, the rapid increase was led by sectors such as AI and machine learning, autonomous driving, virtual reality, augmented reality and IoT-based hyperconnectivity,” it explained.

Samsung Electronics was not that conspicuous in the M&A market for the past three years whereas it acquired Dacor, VIV Labs and Harman, until 2016. From 2017 to 2019, Samsung Electronics’ M&As were limited to some startups and had no significant impact on its business.

It is pointed out that this move should not continue any longer with leading IT companies such as Intel, Apple and Qualcomm becoming increasingly aggressive in the market for more growth opportunities. “Samsung Electronics vice chairman Lee Jae-yong is planning to repeat his father’s success in the non-memory semiconductor market,” said an industry expert, adding, “Quick competitiveness enhancement based on aggressive M&As can be a viable option to that end.”