Semiconductor M&A Activity Continues

In an update to its July report on semiconductor market consolidation, IC Insights points to ongoing M&A activity despite the uncertain business climate, as the value of deals in 2015 nears $80 billion worldwide.

In an update to a report from this summer, industry researcher IC Insights said merger and acquisition activity among makers of semiconductors continues to surge, with the value of deals so far in 2015 totaling $77 billion worldwide. This year’s total is more than six times the value of deals struck during the previous five years, the researcher said.

“IC Insights has previously noted that the unprecedented M&A activity is indicative of IC suppliers experiencing slower sales in their existing market segments and the need to broaden their businesses to stay in favor with investors,” the company said in a prepared statement. “Rising costs of product development and advanced technologies are also driving the need to become bigger and grow sales at higher rates in the second half of this decade.”

These factors are compounded by the potential of the Internet of Things market and the resulting need for suppliers to fill in missing pieces in their product portfolios. IC Insights also notes that China’s “ambitious goal to become self-sufficient in semiconductors and reduce imports of ICs from foreign suppliers has also launched a number of acquisitions by Chinese companies and investment groups.”

The M&A surge is a major trend shaping the industry, revealing the maturing of the market.

 “In addition to the monstrous M&A wave currently taking place, trends such as the lack of any new entry points for startup IC manufacturers, the strong movement to the fab-lite business model, and the declining capex as a percent of sales ratio, all promise to dramatically reshape the semiconductor industry landscape over the next five years,” the researcher said.

Visit IC Insights’ website for more information on the group’s most recent report, including a list of the most recent merger and acquisition announcements.

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