In the past year, the semiconductor industry has been in a down cycle, facing challenges such as declining market demand, oversupply and intensified competition. However, in a period of overall weakness in the industry, M&A activity in the semiconductor space has remained surprisingly buoyant
Mergers and acquisitions of semiconductor companies continue
Technology giants continue to develop into the chip field, and Microsoft is a representative. On January 9, 2023, Microsoft announced the acquisition of Fungible, a DPU chip startup, and Microsoft will apply Fungible's technology in the data center of its Azure cloud platform. In recent years, the development of DPU by cloud vendors is an important trend in the current technology industry. DPU is a hardware device specially designed for data processing and network acceleration, which can provide high-performance and low-latency data processing capabilities in the fields of cloud computing, artificial intelligence and big data.
Microsoft's acquisition demonstrates its long-term investment in data center infrastructure and strengthens its technology and product range. This is another acquisition of a data center hardware start-up company after Microsoft acquired Lumenisity Ltd., showing its emphasis on data center technology and development intentions
In the field of semiconductor equipment, on January 31, 2023, Cohu, a global semiconductor equipment and service provider, announced the acquisition of MCT Worldwide, a semiconductor test and sorting machine automation equipment supplier. Cohu will use the acquisition to develop new test automation solutions to support advanced packaging in panel testing. On February 1, 2023, Advantest, a Japanese semiconductor testing equipment company, announced the acquisition of Taiwanese printed circuit board manufacturer Xingpu Technology, which will provide the company with high-end test board manufacturing capabilities and expand its business in Asia
Foundry field
On February 2, 2023, semiconductor product supplier MACOM announced that through its French subsidiary, it will acquire the assets and operations of OMMIC SAS, a semiconductor manufacturer in the field of wafer manufacturing and epitaxy, for approximately 38.5 million euros, to enhance wafer production capacity and integrate products Supply extends to higher mmWave frequencies. OMMIC SAS has gallium arsenide (GaAs) and gallium nitride (GaN) compound semiconductor manufacturing capabilities
On February 9, 2023, GlobalFoundries announced the acquisition of Renesas Electronics' Conductive Bridge Random Access Memory (CBRAM) technology, a low-power memory solution with low power consumption, high read/write speed, Low manufacturing cost and resistance to harsh environments are used in home and industrial IoT and smart mobile device applications. CBRAM technology was originally owned by Dialog. In 2020, GF signed a license agreement with Dialog, but Dialog was acquired by Renesas in 2021. Now GF has acquired this technology from Renesas.
On February 16, 2023, ON Semiconductor officially acquired GF's 12-inch wafer fab in New York State, USA. Thousands of employees in the original factory have transitioned to ON Semiconductor. The acquisition will enable ON Semiconductor to transform its wafer process from 200mm to 300mm, and at the same time acquire GF-related process technology and licensing agreements
Automotive chip field
Automotive chips are one of the few companies in the semiconductor market that are currently in good condition, which is enough to show the development potential of the automotive chip market. Under this favorable premise, participants in the automotive chip field are constantly improving their strength through frequent mergers and acquisitions. To meet the needs of rapidly developing automotive technology
Among many automotive chip manufacturers, Infineon has the most frequent acquisitions. In the last year alone, Infineon has acquired three companies covering a wide range of fields. Infineon CEO said in an interview at the end of 2022 that the company has prepared one billion euros for acquisitions
In July 2022, Infineon acquired NoBug, an engineering company that mainly provides verification and design services for digital functions in semiconductor products
On March 2, 2023, Infineon announced the acquisition of Canadian company GaN Systems for US$830 million. This is by far the largest deal in the power GaN industry, with the purchase price of USD 830 million accounting for approximately 18% of Infineon's power electronics revenue, which is 4 times higher than the value of the entire power GaN market in 2022. This shows that Infineon wants to capitalize on the growth potential of GaN and strengthen its leadership in power electronics. With the acquisition of GaN Systems, Infineon Technologies acquired not only the company's technology, but also professional talents. Since its establishment in 2008, GaN Systems has trained about 200 employees through cooperation with TSMC in device production. , technology and R&D fundamental skills. This provides Infineon with considerable added value
On May 16, 2023, Infineon announced that it has acquired 100% of the shares of Imagimob AB, a startup company headquartered in Stockholm, Sweden. Imagimob is a leader in the fast-growing micro-machine learning and automated machine learning (TinyML and AutoML) markets, and Infineon intends to enhance its TinyML edge AI capabilities on microcontrollers and sensors with Imagimob's software. Integrating AI functions in MCU has become the common goal of many MCU manufacturers
On March 22, 2023, Renesas Electronics announced the acquisition of Austrian semiconductor company Panthronics, a company focused on near-field communication (NFC) technology. NFC technology is widely used in the automotive market, and most of the leading automotive manufacturers have already deployed NFC in advance through acquisitions
Renesas will also become an important player in this field through its acquisition of Panthronics. Renesas Electronics will expand its connectivity technology portfolio to further enter areas such as fintech, Internet of Things and automotive applications. The acquisition is expected to close by the end of 2023, subject to regulatory approvals and the passage of other closing conditions
In the case of weak growth in the mobile phone market, Qualcomm has also shown a strong offensive in the field of automotive chips. Qualcomm is actively strengthening its strength in the field of automotive chips and improving its business through acquisitions. On May 8, 2023, Qualcomm announced the acquisition of Israel's Autotalks, which focuses on dedicated chips for vehicle-to-everything communication technology (V2X), designed to reduce collisions and improve mobility to improve car safety. Qualcomm plans to integrate Autotalks' solutions into its Snapdragon Digital Chassis portfolio, further boosting its automotive business
EDA & IP, software and other fields
EDA tools play an important role in the chip industry chain. EDA supports chip design, verification, physical implementation and production processes, helping to speed up the chip development cycle and improve design quality. In order to meet the ever-increasing design complexity and market demand, EDA giants have been adopting mergers and acquisitions strategies to promote the development of the industry and their own growth
In May 2023, EDA giant Cadence quietly acquired Pulsic, an EDA company in Bristol, UK. The terms of the acquisition have not been publicly disclosed. Cadence and Pulsic have worked together for several years, including their recent move to a freemium-based licensing model. Cadence is a $55bn (£44bn) technology company that develops electronic design automation (EDA) software. Pulsic is an EDA software company with a history of more than 20 years, focusing on providing solutions for chip design on advanced custom nodes
Not only EDA software suppliers are expanding through acquisitions, but some suppliers in other semiconductor fields are also strengthening their acquisitions in the EDA field, helping these manufacturers to provide more complete and integrated solutions and provide customers with more efficient work. process
On January 13, 2023, IP provider Arteris acquired Semfore, an EDA company. Founded in 2003, Arteris mainly provides Noc (Network on chip) on-chip network, which will be listed independently in October 2021. Semfore is a leading provider of hardware/software interface (HSI) technology. Semfore's EDA tools automatically produce the Soc views needed for hardware design and hardware-related software development, including device drivers, firmware, verification, and documentation. Unified view and automation of this critical SoC integration layer enables customers to accelerate hardware-software development and reduce the risk of costly SoC redesigns
On February 23, 2023, Keysight announced the acquisition of Cliosoft, which specializes in managing design data, including functional IP blocks used in integrated circuits. Acquisition of Cliosoft expands Keysight's EDA software offerings with process and data management (PDM) capabilities. The combined company will continue to provide version control as well as data and IP management solutions through EDA industry relationships including Cadence, Empyrean, MathWorks, Siemens EDA, Silvaco and Synopsys environments, an acquisition important for Keysight that connects protection time A step that will help customers achieve digital transformation and meet future challenges
In April 2023, US industrial conglomerate Emerson Electric agreed to buy National Instruments for US$8.2 billion. The acquisition will strengthen Emerson's position in the automation industry and advance its growth in test and measurement. With this acquisition, Emerson will further expand and diversify its end-market share, leveraging National Instruments' software-connected automation systems as an earnings driver. The transaction will also bring complementary software and innovation capabilities to accelerate the creation of a high-value industrial technology portfolio. The transaction is expected to close in the first half of Emerson's fiscal year 2024
On May 17, 2023, simulation software supplier Ansys acquired an EDA manufacturer Diakopto, which focuses on helping solve key problems caused by layout parasitics. Semiconductor designs are increasingly using advanced process node technologies where interconnect parasitics limit the performance, reliability and functionality of the design. Diakopto's products have been adopted by dozens of customers, including and semiconductor companies, for a wide range of applications
It can be seen that even in the down cycle of the industry, the mergers and acquisitions of semiconductor companies have not decreased at all, which may be due to several reasons:
First, during the down cycle of the industry, market demand has declined, leading to oversupply and intensified price competition. In order to survive and preserve competitive advantages in a highly competitive environment, semiconductor companies tend to integrate market share and resources through mergers and acquisitions, reducing the number of competitors
Second, the downward cycle may cause enterprises in the industry to face pressure to reduce costs and improve efficiency. Through mergers and acquisitions, enterprises can obtain companies with advanced technology and innovative capabilities, enterprises can achieve economies of scale, merge overlapping businesses and resources, reduce redundancy and duplication, thereby reducing costs and improving efficiency
Third, in the semiconductor industry, technological innovation is the key to sustainable development. In the down cycle, some companies may not be able to invest in and promote the research and development of new technologies, and through mergers and acquisitions, companies with stronger technology and R&D capabilities can be obtained to improve their own technological level and innovation capabilities
The fourth is to expand product portfolio and market share through mergers and acquisitions in order to find new growth opportunities. Product line expansion and entry into new market segments can be achieved by acquiring companies with complementary product lines, thereby increasing revenue streams during market downturns
