Despite Thanksgiving, the 'game' between Qualcomm and Broadcom is still going on.
Recently, Qualcomm some investors released a 'friendly' attitude, expressed its willingness to discuss the acquisition program, but only if Broadcom needs to increase the purchase price to at least $ 80. Earlier, Broadcom 70 US dollars per share acquisition of Qualcomm's proposal has been Qualcomm board rejected.
Though Qualcomm officials declined to respond to the news, it can be seen that the capital power behind Broadcom is just around the corner. Broadcom's "Ally" KKR, a Broadgoing ally who has quit without any public action, Semiconductor acquisitions, the famous strength of the United States private equity funds should not be underestimated, and even some people joked Broadcom CEOHockTan is KKR in the semiconductor industry 'spokesman'.
In any case, the "two-pass" M & A case is not a special case of the wave of semiconductor M & As. As competition in the industry intensifies, both the semiconductor giant in Europe and the United States and China's semiconductor companies are faced with the dual pressures of rising technical thresholds and declining profits. Integration is The trend of the times.
Rio Tinto Industry Institute analyst Yao Jiayang told First Financial said in addition to Broadcom's mergers and acquisitions of Qualcomm, the recent Marvell acquisition of Cavium and Dialog acquisition of silego's case, we can see from these mergers and acquisitions, the semiconductor companies on the one hand Enhancing the integrity of solutions in specific areas, on the other hand, is also preparing for revenue growth.
Giant anxiety over technology
The big bang of technology is rewriting the pattern of the semiconductor industry, and the European and American giants on the top of the mountain feel more than ever before.
To Qualcomm, for example, while in the mobile era to beat Intel and other chip giants to become rookie on the market, but in the artificial intelligence, 5G immature before the attack on Wall Street has seemed a bit powerless.
Qualcomm shares outperformed most chip companies this year, losing 16% this year, while the Philadelphia Stock Exchange semiconductor index rose 41% and Broadcom shares rose 47% this year. In the capital markets, there have been fund managers Said it was 'exhausted' for holding Qualcomm shares.
Qualcomm's previous business model, arguably the high cost of research and development subsidized by large royalties, led the way in the market. However, this model is being challenged by major corporations and governments everywhere. Qualcomm is According to the overall price of mobile phone charges, even if the phone's Qualcomm chip only a small part of the overall cost. 'Bud Bud analyst Chen Zihao on the first financial reporter said that from a few years ago, Qualcomm by local governments in the name of unfair trade Sanctions, after the sanctions, Qualcomm's patent revenue also declined.
At the same time, the reporters found out that it was a watershed for Qualcomm in 2014. Qualcomm reported revenue of $ 26.5 billion and net profit of $ 7.97 billion in fiscal 2014. Since then, Qualcomm's revenue has been decreasing and decreased to 22.391 billion U.S. dollars In net profit, it was 5.3 billion U.S. dollars in FY15, slightly up to 5.7 billion U.S. dollars in FY16 and then fell to 2.465 billion U.S. dollars in FY17.
The Broadcom quit said to reporters that the fundamental reason for the acceleration of the semiconductor industry mergers and acquisitions is the decline in gross profit, high-tech star about to become ordinary parts suppliers, the pursuit of economies of scale in the aspirations of even star companies may also suffer the fate of being acquired .
In contrast, other companies that stand on the 'vents', such as NVIDIA, are in a very different situation.It can be seen that in the emerging fields such as artificial intelligence, NVIDIA has taken the lead in the development of the vast majority of the world's neural training network are based on NVIDIA GPU chip, which directly contributed to the continued growth of its performance. In 2017, NVIDIA announced its revenue growth of more than 30%, net profit rose nearly 60%.
'The new market demand is also stimulating new companies to emerge.' Semiconductor industry analyst Liu Yong told reporters that leading enterprises in order to achieve economies of scale and reduce costs, will continue to carry out strategic mergers and acquisitions for the purpose of international mergers at the same time, with After the industry enters post-Moore era, enterprises will also speed up the layout of emerging markets and accelerate the restructure of the competitive landscape in the segments. M & A activities in areas such as Internet of Things, automotive electronics, data centers and artificial intelligence will become increasingly active.
China's semiconductor industry under pressure
Although Qualcomm and Broadcom mergers and acquisitions temporarily no progress, but due to the strong position of both parties in their respective fields and in some areas of overlapping communications, it is foreseeable if the acquisition will pass to some extent, the formation of the market super dominance .
The Broadcom quit told reporters that the principle of mergers and acquisitions before Broadcom to follow is to make money, cut off the business of losing money, and hope and the customer signed a long-term contractual relationship.
HockTan bought Broadcom directly after the price increase of 25%, if the customer does not agree directly out of stock .Human is such a large customer, also be required to place the demand for the coming year ahead of schedule, in order to ensure the availability of the old price. 'The person Told reporters.
The statement has not been confirmed by the two companies, but from the Broadcom market action point of view before, focus on core customers and business, to create technical barriers is the usual way.
At the same time, chip giants are also accelerating the "capture" of new types of unicorn companies, with a view to remaining high during the technological change.
Market research firm ICInsights a report released on the 17th showed that this year the global semiconductor equipment total investment of about 90.8 billion US dollars, Samsung Electronics amounted to 26.0 billion US dollars, accounting for more than two percent.Report pointed out that Samsung increase investment in semiconductor equipment or combat China Semiconductor Enterprise investment confidence, which is expected to allow Samsung Electronics and SK hynix to continue to dominate the semiconductor market.If the nascent semiconductor enterprises in China did not achieve epoch-breaking breakthroughs, such as the formation of the "joint venture," and other leading companies can not be formed with Samsung Competition pattern.
Extension of industry research institute Lin Jianhong also agrees with this statement.He told reporters that the global semiconductor market point of view, is still to IDM (integrated component manufacturing) industry, such as Intel and Samsung accounted for a larger share of the overall market However, at this stage, Chinese semiconductor companies are more powerful, mainly chip-design enterprises, such as Hisilicon under Huawei and Spreadtrum's information under Ziguang.
At the 2017 IC Design Industry Conference in China, Wei Shaojun, chairman of IC Design Branch of China Semiconductor Industry Association, pointed out that based on the statistics of the top 100 IC design companies, the average gross profit margin of the company was about 29.28%, slightly over the previous year It is worth noting that the top ten IC business growth while profitability has continued to weaken.This phenomenon began last year, is still continuing this year.Anonymity of the industry also pointed out to reporters, The recent coaching of domestic chip leader Spreadtrum also reflects the high level of dissatisfaction with the performance, hoping to make adjustments with readiness to cope with more intense market competition.
If Chinese semiconductor companies are to catch up with foreign companies, they must think carefully and integrate the chip design, manufacturing and packaging and testing together in order to have a chance to compete with foreign companies in the future. "Lin Jianhong told reporters.