Recent Tech Consolidation



The motives behind the latest semiconductor company mergers and acquisitions vary.

Consolidation in the semiconductor industry is picking up speed. Some say it’s happening because companies are facing higher costs and slow growth; acquisitions and mergers are expected to alleviate some of the earnings pressure. Consolidating overlapping departments does help a company do more with fewer people in the merged company. While there may be some truth to that, I have also seen some good forecasts for semis in the future. Is there another reason why tech companies are swallowing up other tech companies at a prodigious rate?

Figure 1: Brian Krzanich, Intel chief executive officer, and Dan McNamara (left), corporate vice president and general manager of Intel’s Programmable Solutions Group (formerly Altera), at the inaugural Intel SoC FPGA Developer Forum at IDF 2016. (Credit: Intel Corporation)

Figure 1: Brian Krzanich, Intel chief executive officer, and Dan McNamara (left), corporate vice president and general manager of Intel’s Programmable Solutions Group (formerly Altera), at the inaugural Intel SoC FPGA Developer Forum at IDF 2016. (Credit: Intel Corporation)

Years 2014, 2015, and 2016 saw semiconductor companies busy consolidating into fewer companies, with acquisition announcements dominating the press releases. Here’s a (likely) incomplete list at my last count. (All dollars in U.S.D.):

Voyages and Pink Slips

TriQuint, an RF semiconductor company with a goodly amount of products using wide-bandgap technology merged with RF Micro Devices (RFMD); they are now called Qorvo. The merger was completed in January 2015. The name was chosen to indicate the “core technologies and innovations” that Qorvo supports. Apparently “chorus” + “voyage” = Qorvo (according to The Oregonian.)

Infineon bought International Rectifier for $3B in 2015, with a focus on power semiconductors. Infineon later solidified its intention to acquire the Power and RF division of Cree (the division called “Wolfspeed”) in 2016. Cree has deep roots in wide-bandgap substrates, and since Infineon is a German company, it’s taking longer than originally planned. Infineon hopes to finalize the deal in early 2017. Stay tuned. Cypress Semiconductor and Spansion merged in 2015. Spansion was spun off from AMD in 2006 and specializes in microcontrollers and flash memory. The merger was an all-stock deal that will supposedly save an annual $135M by eliminating redundancy. A large number of pink slips were distributed in relation to this merger.

Intel bought Altera in late 2015 for $16.7B. Altera is (was?) one of the leading makers of Field Programmable Gate Arrays (FPGAs) (Figure 1). Expect to see high-performance mixed processor and FPGA chips in 2017 from Intel. ARM was bought by Softbank in 2016 for $32B, more as an investment than to leverage ARM for its market share in processor technology, however.

Avago Technologies bought Broadcom in early 2016 for $17B in cash and enough Avago stock to reach $37B. The new company has changed its name to Broadcom Limited.

Microchip Technology bought Atmel for $3.56B in 2016. Microchip had bought Micrel in the year before for $839M and bought Supertex in 2014 for $396M. Atmel is the maker of the AVR chip that populates many of the earlier Arduino development boards. Arduino makes and sells open source hardware boards that are made accessible via low prices.

ON Semi bought the venerable Fairchild Semiconductor with $2.4B in cash in September 2016. To raise the cash, ON Semi sold its IGBT product line to Littelfuse, Inc.

Analog Devices Inc. (ADI) plans to acquire Linear Technology for $15B in the first half of 2017.

Now Qualcomm is expected to close a deal by end of 2017 to purchase NXP. Qualcomm is already in the automotive market with the Snapdragon processor, so the purchase of NXP will make Qualcomm a dominant player there. Besides taking advantage of economies of scale, gain in market share can be another reason to purchase. Yet another reason for a tech company to purchase another tech company is to gain tech expertise and talent. Whatever the reason for the widespread consolidation, embedded technology continues to evolve as we face challenges in an increasingly IoT world with all the security challenges that come with it. The bigger they are, the harder they fall. A larger company has more to lose if it gets sideways with quality or security, which in my book are pretty much synonymous.


LynnetteReese_115Lynnette Reese is Editor-in-Chief, Embedded Systems Engineering and Embedded Intel Solutions, and has been working in various roles as an electrical engineer for over two decades. She is interested in open source software and hardware, the maker movement, and in increasing the number of women working in STEM so she has a greater chance of talking about something other than football at the water cooler.

Share and Enjoy:
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google