Wednesday, November 16, 2016

Chip industry turnover of over 240 billion US dollars within two years

After a series of mergers and acquisitions, the chip industry, traders have to take a break, and the market for them to choose high-quality transactions are not many.
In the past two years, semiconductor companies have completed more than $ 240 billion in mergers and acquisitions, according to Dealogic, a financial data provider. So far this year, the semiconductor industry M & A transaction size of 130.2 billion US dollars, setting a new record, higher than last year's record 16% higher. Large transactions led to the overall transaction volume, but this is not a small transaction. Over the past two years, six deals have exceeded $ 10 billion and three have exceeded $ 30 billion.
Why is the M & A deal in the chip industry slowing? The reason is simple: there are not many high-quality chip companies available in the market, and most of the companies that want to buy have completed their own deals. Qualcomm took out most of its $ 30 billion in cash reserves to fund the acquisition of NXP Semiconductors. Broadcom has completed a $ 37 billion merger with Avago Technologies earlier this year and has invested another $ 5.5 billion to acquire the network equipment company Brocade Communications Systems. According to financial information provider FactSet, Intel spent more than $ 15 billion last year on acquiring Altera, and then acquired or planned to acquire 12 smaller companies. 50yxf100mce8x11.5
This year's chip industry mergers and acquisitions scale set a new record
Regulatory opposition is another factor restricting chip industry M & A transactions, at least in the chip manufacturing equipment segment of the field is the case. Wafer-equipment makers Lam Research and KLA-Tencor canceled a $ 10.6 billion merger last month after a rigorous review by the US Department of Justice. Applied Materials last year to try to $ 29 billion merger with Tokyo Electronics, but also by the United States Department of Justice of the opposition. Regulatory objections may discourage other chip companies from pursuing larger-scale deals.
Price is also an obstacle, the performance of chip stocks far better than other technology industry stocks. So far this year, the Philadelphia Semiconductor Index has risen more than 25%, while the Nasdaq Composite Index rose only 4%. Nvidia and AMD are often rumored to buy, with the growth rate of growth this year, the two companies' share price has more than doubled. 6437288-2
But chip companies will continue to look for ways to drive growth in low interest rates. Technology companies will be more interested in the automotive field, which acquired from Qualcomm NXP, Samsung 8 billion US dollars acquisition of Harman International can be seen.
A handful of chip companies are not involved in the recent takeover binge. Over the past two years, Nvidia has only acquired a small company, currently sitting on about 3.7 billion US dollars in net cash. Texas Instruments is currently the fourth-largest chip company, since 2011 to $ 6.5 billion acquisition of National Semiconductor, Texas Instruments has never had a deal.
However, these companies will also carefully selected acquisition targets. Texas Instruments CFO in September this year, said at the Investment Conference, the company mainly in the autonomous areas in the next four to five years to bring value-added transactions. In the recent acquisition of frequent transactions, the choice of Texas Instruments less and less.

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