Semiconductor Industry - M&A Analysis and Future Trends by Acquirer Type (IDM, Fabless, Foundry), Deal Value, End-User, and Region

February 2016 | 161 pages | ID: SBB892EEDC7EN
MarketsandMarkets

Abstracts

“Need for improving technology, product, and services portfolio is driving the M&A activities in the semiconductor industry”

The semiconductor industry is witnessing tremendous growth in M&A activity with deals worth more than USD 120 billion announced in 2015. The driving factors behind the increase in M&A activity include need to increase scale, increasing cost of chip manufacturing, intense industry competition, and the need for companies to improve their technology, product, and services portfolio.

“Communications sector a major focus for M&A deals”

The major end user segments of the semiconductor market are communications, data processing, industrial electronics, automotive electronics, and consumer electronics. The communications segment consists of smartphones, feature phones, wireline communication, and wireless communication. There has been a tremendous growth of smartphone shipments in the recent years. With the advent of connected or smart devices, there has been an increase in the complexity of electronics required to leverage the technology behind these devices. This has had a positive impact on the growth of the semiconductor industry driving semiconductor companies towards innovation. The market for connected devices is expected to grow rapidly and run in billions by 2020.

In the process of determining and verifying the market size for several segments of the semiconductor market, data was gathered through secondary research, extensive primary interviews were conducted with key people. Break-up of profile of primary participants is given below as:

• By Company Type: Tier 1 – 45 %, Tier 2 – 33% and Tier 3 – 22%
• By Designation: C level – 42%, Director level – 33%, Others – 25%
• By Region: Americas – 39%, Europe – 25%, APAC – 29%, RoW – 7%

With the expected growth of Internet of Things (IoT), a huge opportunity exists for semiconductor companies to position themselves for the next phase of growth in the semiconductor industry. This might require acquiring new products, technologies, and IP to develop the capability of delivering comprehensive integrated solutions to their customers.

Following companies are profiled in the report and include key integrated device manufacturers (IDMs), fabless semiconductor companies, and semiconductor foundries:

1. Intel Corporation (U.S.)
2. Broadcom Corporation (U.S.)
3. Qualcomm Incorporated (U.S.)
4. Mediatek, Inc (Taiwan)
5. Avago Technologies Ltd (U.S.)
6. SK Hynix, Inc. (South Korea)
7. Micron Technology, Inc. (U.S.)
8. Samsung Electronics Co., Ltd (South Korea)
9. Taiwan Semiconductor Manufacturing Co., Ltd (Taiwan)
10. GLOBALFOUNDRIES Inc (U.S.)

The report will help the market leaders/new entrants in the semiconductor industry in the following ways:

1. This report categorizes M&A during 2014–2015 by deal value, acquirer type, end user, and geography with review of ten big ticket deals giving the buyers an insight into the latest M&A trends in the semiconductor industry.
2. The report also provides an overview of the semiconductor industry, analyzing key component segments and end user segments. Furthermore, stakeholders can get an understanding of the pulse of the M&A scenario with analysis of the drivers, restraints, challenges, and opportunities in the M&A landscape.
3. The report also reviews key M&A strategies adopted by top semiconductor companies and highlights key strategies to be followed in the current industry scenario along with a brief analysis of potential acquisition targets.

Contents

1 INTRODUCTION

1.1 OBJECTIVES OF THE STUDY
1.2 INDUSTRY DEFINITION
1.3 STUDY SCOPE
  1.3.1 SEGMENTATION OF M&A DEALS
  1.3.2 YEARS CONSIDERED FOR THE STUDY
1.4 CURRENCY & PRICING
1.5 LIMITATIONS
1.6 STAKEHOLDERS

2 RESEARCH METHODOLOGY

2.1 RESEARCH DATA
  2.1.1 SECONDARY DATA
    2.1.1.1 Key data from secondary sources
  2.1.2 PRIMARY DATA
    2.1.2.1 Key data from primary sources
    2.1.2.2 Key industry insights
    2.1.2.3 Breakdown of Primaries
  2.1.3 BOTTOM-UP APPROACH
  2.1.4 TOP-DOWN APPROACH
2.2 DATA ANALYSIS & TRIANGULATION
2.3 RESEARCH ASSUMPTIONS

3 EXECUTIVE SUMMARY

4 PREMIUM INSIGHTS

4.1 SIGNIFICANT GROWTH IN SEMICONDUCTOR M&A ACTIVITIES IN 2015
4.2 M&A IN SEMICONDUCTOR INDUSTRY – DEAL VALUES
4.3 M&A IN SEMICONDUCTOR INDUSTRY – DEAL VOLUMES
4.4 BIG TICKET DEALS FROM 2011–2015
4.5 STRATEGY ROADMAP
4.6 ANALYSIS OF BILLION DOLLAR M&A DEALS 2014–2015

5 MARKET OVERVIEW

5.1 INTRODUCTION
5.2 EVOLUTION
5.3 M&A DEALS CLASSIFICATION
  5.3.1 M&A DEALS, BY ACQUIRER TYPE
  5.3.2 M&A DEALS, BY DEAL VALUE
  5.3.3 M&A DEALS, BY END USER
  5.3.4 M&A DEALS, BY GEOGRAPHY
5.4 MARKET DYNAMICS
  5.4.1 DRIVERS
    5.4.1.1 Need to increase scale
    5.4.1.2 Increasing cost of chip manufacturing
    5.4.1.3 Intense industry competition
    5.4.1.4 Improving technology, product, and services portfolio
  5.4.2 RESTRAINTS
    5.4.2.1 Difficulty in combining resources and integrating them in a single company
    5.4.2.2 Lengthy regulatory approval cycles
  5.4.3 OPPORTUNITIES
    5.4.3.1 Chip demand expected to be driven by Internet of Things (IoT)
    5.4.3.2 Growth of mobile devices
  5.4.4 CHALLENGES
    5.4.4.1 Decreasing ASP of semiconductor chips
  5.4.5 KEY SUCCESS FACTOR
    5.4.5.1 Providing comprehensive system solutions

6 INDUSTRY TRENDS

6.1 INTRODUCTION
6.2 VALUE CHAIN ANALYSIS
6.3 KEY INFLUENCERS
6.4 PORTER’S FIVE FORCES ANALYSIS
  6.4.1 INTENSITY OF RIVALRY
  6.4.2 THREAT OF SUBSTITUTES
  6.4.3 BARGAINING POWER OF BUYERS
  6.4.4 BARGAINING POWER OF SUPPLIERS
  6.4.5 THREAT OF NEW ENTRANTS
6.5 KEY TRENDS
  6.5.1 INCREASING CHIP COMPLEXITY
  6.5.2 SHIFT TOWARDS SMART DEVICES AND CONNECTIVITY

7 REVIEW OF KEY INDUSTRY SEGMENTS

7.1 INTRODUCTION
7.2 SEMICONDUCTOR COMPONENT MARKET REVIEW
7.3 SEMICONDUCTOR MARKET-GEOGRAPHIC REVIEW
7.4 SEMICONDUCTOR MARKET-END USER SEGMENT REVIEW
  7.4.1 DATA PROCESSING
  7.4.2 COMMUNICATIONS
  7.4.3 CONSUMER ELECTRONICS
  7.4.4 AUTOMOTIVE ELECTRONICS
  7.4.5 INDUSTRIAL ELECTRONICS

8 MERGERS & ACQUISITIONS

8.1 INTRODUCTION
8.2 M&A, BY DEAL VALUE
8.3 M&A, BY ACQUIRER TYPE
  8.3.1 IDM
  8.3.2 FABLESS
  8.3.3 FOUNDRY
8.4 M&A, BY REGION
8.5 M&A, BY END USER
8.6 REVIEW OF KEY MERGERS AND ACQUISITIONS (2011–2015)
  8.6.1 AVAGO TECHNOLOGIES LTD ACQUIRES BROADCOM CORPORATION
  8.6.2 AVAGO TECHNOLOGIES LTD ACQUIRES LSI CORPORATION
  8.6.3 QUALCOMM INC. ACQUIRES CSR PLC
  8.6.4 INTEL CORPORATION ACQUIRES ALTERA CORPORATION
  8.6.5 NXP SEMICONDUCTORS NV ACQUIRES FREESCALE SEMICONDUCTOR LTD
  8.6.6 DIALOG SEMICONDUCTOR PLC ACQUIRES ATMEL CORPORATION
  8.6.7 WESTERN DIGITAL CORPORATION ACQUIRES SANDISK CORPORATION
  8.6.8 ON SEMICONDUCTOR CORP. ACQUIRES FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC.
  8.6.9 LATTICE SEMICONDUCTOR CORPORATION ACQUIRES SILICON IMAGE, INC.
  8.6.10 CYPRESS SEMICONDUCTOR CORPORATION ACQUIRES SPANSION INC.

9 FUTURE INDUSTRY ROADMAP

9.1 INTRODUCTION
9.2 M&A TRENDS IN THE SEMICONDUCTOR INDUSTRY
9.3 KEY M&A STRATEGIES
  9.3.1 POST-MERGER INTEGRATION
  9.3.2 IDENTIFICATION OF ACQUISITION TARGETS
9.4 POTENTIAL ACQUISITION TARGETS
  9.4.1 XILINX, INC.
  9.4.2 MAXIM INTEGRATED PRODUCTS, INC.
  9.4.3 MICRON TECHNOLOGY, INC.
  9.4.4 RENESAS ELECTRONICS CORPORATION
  9.4.5 CAVIUM, INC.
  9.4.6 LATTICE SEMICONDUCTOR CORPORATION
  9.4.7 ADVANCED MICRO DEVICES, INC. (AMD)
  9.4.8 SKYWORKS SOLUTIONS, INC.
  9.4.9 MARVELL TECHNOLOGY GROUP LTD.
  9.4.10 NVIDIA CORPORATION

10 COMPETITIVE LANDSCAPE

10.1 OVERVIEW
10.2 MARKET RANKINGS, SEMICONDUCTOR INDUSTRY
10.3 COMPETITIVE SITUATION AND TRENDS
  10.3.1 NEW PRODUCT DEVELOPMENT/NEW PRODUCT LAUNCH
  10.3.2 PARTNERSHIPS, AGREEMENTS, ALLIANCES, AND COLLABORATIONS
  10.3.3 ACQUISITIONS AND EXPANSIONS
  10.3.4 OTHER DEVELOPMENTS

11 COMPANY PROFILES

(Overview, Products and Services, Financials, Strategy & Development)*

11.1 INTEL CORPORATION
11.2 BROADCOM CORPORATION
11.3 QUALCOMM INCORPORATED
11.4 MEDIATEK, INC.
11.5 AVAGO TECHNOLOGIES LIMITED
11.6 SK HYNIX, INC.
11.7 MICRON TECHNOLOGY, INC.
11.8 SAMSUNG ELECTRONICS CO., LTD.
11.9 TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.
11.10 GLOBALFOUNDRIES INC

*Details on Overview, Products and Services, Financials, Strategy & Development might not be Captured in case of Unlisted Companies.

12 APPENDIX

12.1 INSIGHTS OF INDUSTRY EXPERTS
12.2 DISCUSSION GUIDE
12.3 INTRODUCING RT: REAL-TIME MARKET INTELLIGENCE
12.4 AVAILABLE CUSTOMIZATIONS
12.5 RELATED REPORTS

List Of Tables

LIST OF TABLES

Table 1 M&A DEALS CLASSIFICATION: BY ACQUIRER TYPE
Table 2 INCREASING COST OF CHIP MANUFACTURING ACT AS A MAJOR DRIVER FOR M&A DEALS
Table 3 LENGTHY REGULATORY APPROVAL CYCLE RESTRAINING THE NUMBER OF M&A DEALS
Table 4 INTERNET OF THINGS IS AN EXCITING GROWTH OPPORTUNITY
Table 5 DECREASING ASP OF SEMICONDUCTOR CHIPS IS A MAJOR CHALLENGE FOR GROWTH IN THE SEMICONDUCTOR MARKET
Table 6 SEMICONDUCTOR INDUSTRY: KEY PLAYER RANKING ANALYSIS, 2014
Table 7 SEMICONDUCTOR INDUSTRY: MARKET RANKINGS, BY KEY PLAYER, 2014
Table 8 NEW PRODUCT DEVELOPMENTS/NEW PRODUCT LAUNCHES, 2014–2015
Table 9 PARTNERSHIPS, AGREEMENTS, ALLIANCES, AND COLLABORATIONS 2014–2015
Table 10 ACQUISITIONS, 2014–2015
Table 11 OTHER DEVELOPMENTS, 2014–2015

List Of Figures

LIST OF FIGURES

Figure 1 MERGER AND ACQUISITION DEALS CLASSIFICATION
Figure 2 RESEARCH DESIGN
Figure 3 RESEARCH FLOW
Figure 4 BOTTOM-UP APPROACH
Figure 5 TOP-DOWN APPROACH
Figure 6 DATA TRIANGULATION
Figure 7 SEMICONDUCTOR INDUSTRY TO GROW AT A SLUGGISH PACE BETWEEN 2015 AND 2020
Figure 8 AUTOMOTIVE ELECTRONICS IS EXPECTED TO GROW AT THE HIGHEST RATE DURING THE FORECAST PERIOD
Figure 9 COMPANIES IN THE NORTH AMERICA WERE MOST ACTIVE IN M&A ACTIVITIES
Figure 10 CONSOLIDATION IN THE SEMICONDUCTOR INDUSTRY DRIVEN BY INCREASING CHIP MANUFACTURING COST
Figure 11 LOW INTEREST RATES HAVE MADE M&A AN ATTRACTIVE STRATEGY IN 2015
Figure 12 AVERAGE VALUE OF M&A DEALS INCREASED IN 2015
Figure 13 AVAGO-BROADCOMM IS THE BIGGEST DEAL IN SEMICONDUCTOR M&A HISTORY
Figure 14 STRATEGY ROADMAP OF COMPANIES DEPENDED ON THE END USER VERTICALS
Figure 15 THE COMMUNICATIONS END USER SEGMENT WAS IMPACTED BY THE HIGHEST NUMBER OF BILLION DOLLAR DEALS
Figure 16 EVOLUTION OF THE SEMICONDUCTOR INDUSTRY
Figure 17 M&A DEALS CLASSIFICATION: BY DEAL VALUE
Figure 18 M&A DEALS CLASSIFICATION: BY END USER
Figure 19 M&A DEALS CLASSIFICATION: BY GEOGRAPHY
Figure 20 INCREASING COST OF CHIP MANUFACTURING IS DRIVING SEMICONDUCTOR COMPANIES TO GROW VIA MERGER AND ACQUISITION DEALS
Figure 21 VALUE CHAIN ANALYSIS: MAJOR VALUE ADDED DURING THE R&D AND MANUFACTURING PHASE
Figure 22 PORTER’S FIVE FORCES ANALYSIS, 2014
Figure 23 PORTER’S FIVE FORCES ANALYSIS,2014
Figure 24 M&A IN SEMICONDUCTOR INDUSTRY AND FUTURE INDUSTRY ROADMAP: INTENSITY OF RIVALRY
Figure 25 M&A IN SEMICONDUCTOR INDUSTRY AND FUTURE INDUSTRY ROADMAP: THREAT OF SUBSTITUTES
Figure 26 M&A IN SEMICONDUCTOR INDUSTRY AND FUTURE INDUSTRY ROADWAY: BARGAINING POWER OF BUYERS
Figure 27 M&A IN SEMICONDUCTOR INDUSTRY AND FUTURE INDUSTRY ROADMAP: BARGAINING POWER OF SUPPLIERS
Figure 28 M&A IN SEMICONDUCTOR INDUSTRY AND FUTURE INDUSTRY ROADMAP: THREAT OF NEW ENTRANTS
Figure 29 SEMICONDUCTOR MARKET EXPECTED TO EXPERIENCE A STEADY GROWTH
Figure 30 LOGIC SEGMENT TO DOMINATE THE SEMICONDUCTOR COMPONENT MARKET
Figure 31 SENSORS AND ACTUATORS SEGMENT TO GROW AT THE HIGHEST RATE BETWEEN 2015 AND 2020
Figure 32 CHINA HELD THE LARGEST MARKET FOR THE SEMICONDUCTOR INDUSTRY IN 2014
Figure 33 CHINA’S SEMICONDUCTOR CONSUMPTION GROWTH HAS OUTPACED EVERY REGION
Figure 34 DATA PROCESSING SEGMENT TO DOMINATE THE SEMICONDUCTOR MARKET
Figure 35 NUMBER OF BIG TICKET DEALS INCREASED IN 2014–2015
Figure 36 IDM AND FABLESS SEMICONDUCTOR COMPANIES ACCOUNTED FOR MAJORITY OF THE M&A DEALS DURING 2014 AND 2015
Figure 37 COMPANIES IN NORTH AMERICA HAVE UNDERGONE HIGHEST NUMBER OF M&A DEALS BETWEEN 2014 AND 2015
Figure 38 THE COMMUNICATIONS END USER SEGMENT WAS MAJORLY IMPACTED BY M&A DEALS DURING 2014 AND 2015
Figure 39 AVAGO’S PRODUCT PORTFOLIO EXPECTED TO SIGNIFICANTLY INCREASE POST BROADCOM ACQUISITION
Figure 40 AVAGO’S MARKET SHARE TO GROW IN THE COMMUNICATIONS IC MARKET
Figure 41 LSI ’S PRODUCT PORTFOLIO BEFORE AVAGO ACQUISITION
Figure 42 INDUSTRY SOLUTIONS OFFERED BY CSR PLC
Figure 43 ALTERA CORPORATION PRODUCT PORTFOLIO
Figure 44 NXP-FREESCALE COMBINATION MAKES A STRONG COMPANY IN THE SEMICONDUCTOR INDUSTRY
Figure 45 NXP-FREESCALE COMBINATION TO HOLD THE LARGEST SHARE IN THE AUTOMOTIVE SEMICONDUCTOR MARKET BASED ON 2014 SEGMENT REVENUES
Figure 46 ATMEL ACQUISITION EXPECTED TO HELP DIALOG DIVERSIFY ITS CUSTOMER BASE
Figure 47 ATMEL ACQUISITION EXPECTED TO HELP DIALOG BUILD A COMPREHENSIVE IOT PLATFORM
Figure 48 SANDISK ACQUISITION WOULD HELP WESTERN DIGITAL TO REDUCE ITS DEPENDENCE ON HDD SALES
Figure 49 SANDISK ACQUISITION TO HELP WESTERN DIGITAL TO GET A STRONG FOOTHOLD IN THE SSD MARKET
Figure 50 FAIRCHILD SEMICONDUCTOR PRODUCT PORTFOLIO ENCOMPASSES A WIDE RANGE OF SEMICONDUCTOR PRODUCTS
Figure 51 ACQUIRING SILICON IMAGE WOULD HELP LATTICE SEMICONDUCTOR TO EXPAND ITS PRESENCE IN CONSUMER, COMMUNICATIONS, AND INDUSTRIAL SEGMENTS
Figure 52 SPANSION INC. PRODUCT PORTFOLIO
Figure 53 NUMBER OF DEALS WORTH 500 MILLION EACH OR LESS DOMINATED THE SEMICONDUCTOR INDUSTRY LANDSCAPE BETWEEN 2000 AND 2010
Figure 54 BREAKDOWN OF DEALS WORTH BELOW 500 MILLION CATEGORY BETWEEN 2000 AND 2010
Figure 55 XILINX, INC.: COMPANY SNAPSHOT
Figure 56 MAXIM INTEGRATED PRODUCTS, INC.: COMPANY SNAPSHOT
Figure 57 MICRON TECHNOLOGY, INC.: COMPANY SNAPSHOT
Figure 58 RENESAS ELECTRONICS CORPORATION: COMPANY SNAPSHOT
Figure 59 CAVIUM, INC.: COMPANY SNAPSHOT
Figure 60 LATTICE SEMICONDUCTOR CORPORATION: COMPANY SNAPSHOT
Figure 61 ADVANCED MICRO DEVICES, INC.: COMPANY SNAPSHOT
Figure 62 SKYWORKS SOLUTIONS, INC.: COMPANY SNAPSHOT
Figure 63 MARVELL TECHNOLOGY GROUP LTD.: COMPANY SNAPSHOT
Figure 64 NVIDIA CORPORATION: COMPANY SNAPSHOT
Figure 65 ACQUISITIONS AND NEW PRODUCT DEVELOPMENTS WERE KEY GROWTH STRATEGIES DURING 2011–2015
Figure 66 QUALCOMM GREW AT THE HIGHEST GROWTH RATE BETWEEN 2010 AND 2014
Figure 67 BATTLE FOR MARKET SHARE: NEW PRODUCT LAUNCHES/NEW PRODUCT DEVELOPMENTS DRIVE COMPETITIVE TRENDS
Figure 68 INTEL CORPORATION.: COMPANY SNAPSHOT
Figure 69 INTEL CORPORATION: SWOT ANALYSIS
Figure 70 BROADCOM CORPORATION: COMPANY SNAPSHOT
Figure 71 BROADCOM CORPORATION: SWOT ANALYSIS
Figure 72 QUALCOMM INCORPORATED.: COMPANY SNAPSHOT
Figure 73 QUALCOMM INCORPORATED: SWOT ANALYSIS
Figure 74 MEDIATEK,INC.: COMPANY SNAPSHOT
Figure 75 MEDIATEK, INC.: SWOT ANALYSIS
Figure 76 AVAGO TECHNOLOGIES LIMITED: COMPANY SNAPSHOT
Figure 77 AVAGO TECHNOLOGIES LIMITED: SWOT ANALYSIS
Figure 78 SK HYNIX, INC.: COMPANY SNAPSHOT
Figure 79 SK HYNIX, INC.: SWOT ANALYSIS
Figure 80 MICRON TECHNOLOGY, INC.: COMPANY SNAPSHOT
Figure 81 MICRON TECHNOLOGY, INC.: SWOT ANALYSIS
Figure 82 SAMSUNG ELECTRONICS CO., LTD.: COMPANY SNAPSHOT
Figure 83 SAMSUNG ELECTRONICS CO., LTD.: SWOT ANALYSIS
Figure 84 TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.: COMPANY SNAPSHOT
Figure 85 TAIWAN SEMICONDUCTOR MANUFACTURING CO., LTD.: SWOT ANALYSIS
Figure 86 GLOBAL FOUNDRIES INC: SWOT ANALYSIS