A market research firm, IC Insights, announced that the total amount of global semiconductor mergers and acquisitions (M&As) in the first half of the year was $20.6 billion (KRW 27.71 trillion). This is a 13% increase compared to the same period last year (KRW 24,488.1 billion). However, the size of semiconductor M&A this year seems to not meet the size of annual average.
Four 'big deals' accounted for most of the M&A amount in the first half according to IC Insights. The largest transaction was the acquisition of Tsinghua Unigroup by a Chinese sovereign wealth fund consortium, which worth US$9.449 billion (KRW 12.71 trillion).
Tsinghua Unigroup is a semiconductor company founded by Tsinghua University, the alma mater of Chinese President Xi Jinping. Tsinghua Unigroup gained size through various acquisitions in order to achieve 'semiconductor growth; however, it was caught up in debt exceeding KRW 30 trillion. It was acquired by a fund consortium related to the Chinese government after going bankrupt in July of last year, and the payment was made in April of this year.
Yangtze Memory Technologies Corp (YMTC), a subsidiary of Tsinghua Unigroup, is speeding up its efforts to close the memory gap with South Korea, and announced that it succeeded in developing a 232-layer 3D NAND last month.
The next largest M&A is Intel's acquisition of Foundry Tower in Israel. Intel announced in February that it would acquire Tower for $5.4 billion. It is part of the expansion of Intel's foundry business, and the Tower is the 8th largest foundry in the world.
IC Insights anticipates that the final stake purchase will be done next February.
The third largest M&A is the acquisition of Taiwanese Silicon Motion by US’ MaxLinear. The cost of acquisition is $3.8 billion (KRW 5.1034 trillion). MaxLinear specializes in chips for broadband communication. Silicon Motion has expanded its business area to NAND flash controllers, which has become its main focus.
The fourth largest M&A is the acquisition of networking chip and software startup Pensando, by AMD’. AMD signed an acquisition contract for $1.9 billion (KRW 2.55 trillion) in April, which was only two months after AMD completed the acquisition of field programmable gate array (FPGA) semiconductor company Xilinx. This was a move to enhance the competitiveness of Pensando's data center business.
The Xilinx acquisition process took 14 months to complete, and recorded the largest M&A deal in the history of the semiconductor industry with a final price of $49.8 billion (KRW 66.891.3 billion won).
IC Insights predicted that the total amount of global semiconductor M&As this year will exceed last year’s $22.7 billion (KRW 30.47 trillion). However, it is now expected to fall short of the annual average of $29 billion (KRW 38.92 trillion), excluding the record high 2020’s average.
Along with the Xilinx acquisition, Nvidia's announcement of its now-retracted acquisition of UK ARM recorded an exceptionally high M&A total of $117.9 billion (KRW 158.23 trillion) in 2020.
The first half’s global semiconductor industry M&A 'big deals’
Provided by IC Insights
By Staff Reporter Yoonseop Song (sys@etnews.com)