Archive for January, 2017

There’s a Whole lot of Consolidation Goin’ On

Thursday, January 19th, 2017

Mergers and Acquisitions heat up as semiconductor companies respond to slowing growth and rising costs.

Recent years: 2014, 2015, and 2016 have been busy ones for semiconductor companies. They were busy consolidating into fewer companies as acquisitions dominated the press releases. Consensus has it that rising costs and slow growth were the impetus as economies of scale due to the acquisitions and mergers are expected to alleviate some of the earnings pressure.


Here’s a (likely) incomplete list at my last count. (All dollars in U.S.D.):

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.) I suppose they could have had the public suggest or vote on a name, but that’s how you end up with names like “Boaty McBoat Face,” so they made a smart and decisive move to take a name that is very unique.

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 they had 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, 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). Expect to see high-performance mixed processor and FPGA chips in 2017 from Intel.

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.

I am sure there were more mergers and aquisitions than I have listed above. The major acquisition of Altera by Intel will be interesting, because Intel made a smart move towards enhancong their high-performance solutions. The above acquisitions are not small start-ups getting gobbled up by larger, established companies. It is likely that there are more to come.