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2015 saw more than $100 billion in chip-maker M&A action

Dec 28, 2015 — by Guest Contributor — 1,317 views

During 2015, there were more than $100 billion worth of mergers and acquisitions in the semiconductor market, writes Alexandru Voica in this guest column.

 

Semiconductors buyers club: the mergers and acquisitions of 2015
by Alex Voica

This year we’ve seen unprecedented consolidation in the technology market. The story that perhaps best defined 2015 was Dell acquiring EMC for a whopping $67 billion, making it one of the biggest buys in the history of corporate trading. Semiconductor companies have also been on a spending spree lately, racking up more than $100 billion in mergers and acquisitions for this year alone.



2015’s semiconductor consolidation landscape
(click image to enlarge)

Since the mobile segment is experiencing a slowdown at the moment, silicon vendors are looking to markets like automotive, IoT and security for future growth.

The list below includes some of the high-profile purchases of the last 12 months, from the smallest to the largest deals.

 

Under $500 million . . .
  • Qualcomm Atheros acquired Ikanos Communications — The $47 million acquisition is intended to expand Qualcomm Atheros’ footprint in the carrier fixed line segment with the addition of high-performance broadband access and modem technologies critical to enhancing users’ connected experiences in the home. Rahul Patel, senior VP and GM for connectivity at Qualcomm Technologies, Inc: “The combination of Qualcomm Atheros’ broad home gateway IP portfolio, including Wi-Fi, powerline, small cell, and Ethernet switch technologies, and Ikanos’ advanced wired modem technology, is designed to create a complete solution for a wide range of home gateway products to better serve the carrier segment.”
  • Microsemi completes acquisition of Vitesse — Microsemi, a provider of industrial and enterprise semiconductor solutions, made a move to acquire Vitesse for $389 million. Vitesse designs a diverse portfolio of high-performance semiconductors, application software, and integrated turnkey systems solutions for carrier, enterprise and IoT networks worldwide. “This acquisition is further evidence of Microsemi’s continuing commitment to grow as a communications semiconductor company,” stated James J. Peterson, Microsemi chairman and CEO.

 

$500 million to $1 billion . . .
  • Avago initiates Emulex Corporation acquisition — Avago started the year with a bang by going after Emulex’s connectivity solutions in a $606 million deal, aiming to create the industry’s broadest portfolios for enterprise storage. President and CEO of Avago, Hock Tan: “Emulex’s connectivity business fits very well with Avago’s existing portfolio serving the enterprise storage end market.”
  • Lattice Semiconductor closes acquisition of Silicon Image — Lattice Semiconductor, a supplier of programmable connectivity solutions, closed its acquisition of wired and wireless connectivity provider Silicon Image. Of the $600 million merger, Darin G. Billerbeck, Lattice Semiconductor’s President and Chief Executive Officer, said, “…We have significantly expanded our Company’s capabilities, with the addition of MHL, HDMI and 60 GHz Intellectual Property, enhanced our business prospects and financial profile, and further diversified our global customer base.”
  • Microchip acquires Micrel — The $839 million deal brings analog semiconductor company Micrel under Arizona-based Microchip. “Micrel’s portfolio of linear and power management products, LAN solutions and timing and communications products, as well as their strong position in the industrial, automotive and communications markets, complement many of Microchip’s initiatives in these areas,” said Steve Sanghi, president and CEO of Microchip Technology.

 

$1 billion to $5 billion . . .
  • Qualcomm acquires CSR — The San Diego-based semiconductor and wireless solutions company Qualcomm completed its acquisition of Cambridge Silicon Radio (CSR), a British company specializing in end-to-end semiconductor and software solutions for the IoT and automotive segments.
  • Microsemi wins battle to buy PMC-Sierra for $2 billion — Microsemi reached a deal to buy chip maker PMC-Sierra Inc. for $2.5 billion in cash and stock, after several weeks of dueling with Skyworks Solutions Inc. The acquisition provides Microsemi with a leading position in high-performance and scalable storage solutions, while also adding a complementary portfolio of communications products.
  • Dialog Semiconductor bids for Atmel (pending) — The proposed $4.6 billion acquisition would create a global leader in both power management and embedded processing solutions. The resulting company would support mobile, IoT and automotive customers, addressing an attractive, fast growing market opportunity of approximately $20 billion by 2019. Atmel recently announced it had received another offer from an undisclosed company.

 

Over $5 billion . . .
  • Intel buys Altera — Altera, a maker of programmable logic semiconductors, was bought by the industry giant for $16.7 billion: “The acquisition will couple Intel’s leading-edge products and manufacturing process with Altera’s leading field-programmable gate array (FPGA) technology. The combination is expected to enable new classes of products that meet customer needs in the data center and Internet of Things market segments.”
  • Avago acquires Broadcom — In another massive acquisition, the chip manufacturer Avago acquired Broadcom, an American fabless semiconductor company in the wireless and broadband communication business, for $37 billion. This puts Avago in the top ranks of semiconductor makers, though still behind Intel and Qualcomm. Avago has been aggressively acquiring companies since it went public in 2009.
  • NXP acquires Freescale — The biggest buy of the year for chip makers came in March when NXP announced a $40 billion merger with Freescale. The merger made NXP the top automotive semiconductor supplier and general-purpose MCU supplier in the world. It also created a high performance mixed signal semiconductor industry leader, with combined revenue of greater than $10 billion. “The combination of NXP and Freescale creates an industry powerhouse focused on the high growth opportunities in the Smarter World. We fully expect to continue to significantly out-grow the overall market, drive world-class profitability and generate even more cash, which taken together will maximize value for both Freescale and NXP shareholders,” said Richard Clemmer, NXP CEO.

 

Undisclosed values . . .
  • NXP completes Quintic acquisition — NXP made a strategic move in the wearable business when it announced the purchase of Quintic in February. Mark Hamersma, GM and SVP of Emerging Businesses at NXP: “With NXP’s strength in ultra-low power microcontrollers and security, broad IoT application solutions offering, and global sales and distribution reach, the acquired Quintic business should become a true leader in its market.”
  • NXP acquires Athena SCS — In another move to establish itself in the IoT market, NXP acquired Athena SCS, a provider of solutions securing the rapidly expanding connected world. Athena SCS Ltd. is an independent UK-based developer of state-of-the art smart card solutions for access, enterprise, eGovernment, transportation, payment and mobile solutions.
  • Intel grabs Lantiq — Smart gateways and intelligent access networks are two important elements in Intel’s connected home efforts. This acquisition aims to expand Intel’s influence in the cable residential gateway market and broaden its offering to other gateway markets, including DSL, fiber, LTE, retail and IoT smart routers. Dan Artusi, Lantiq CEO: ” Together [ed. with Intel] we can drive the transformation of the broadband customer premises equipment (CPE) as it becomes a smart gateway that connects an increasingly diverse roster of devices and services in the home.”
  • Freescale acquires CogniVue — CogniVue Corp is an image processing IP developer based in Canada whose products are used in advanced driver assistance system SoC solutions. The terms of the deal were undisclosed.

 

Alexandru Voica is a Senior Technology Marketing Specialist at Imagination Technologies. This column was first published on Voica’s blog and appears here with permission.

 

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