On March 2, according to Reuters, chipmaker Microchip Technology Inc. announced that it will acquire Microsemi Corp. in cash for US $ 68.78 at a total of 8.35 billion U.S. dollars, A premium of 7% over the closing price of the acquired company on March 1 of $ 64.3.
Currently, the deal is awaiting the consent of the shareholders of Micronesia, which is expected to be completed in the second quarter of this year JP Morgan Chase as financial adviser to Microchip Technology (91.29, 2.27, 2.55%), Will provide $ 5.6 billion for Microchip Technology acquisition financing.
Public information shows that Microsem is a California-based Aliso Viejo company that provides high-performance analog and mixed-signal integrated circuits for aerospace, defense, communications, data center and industrial applications. Semiconductors .
Microchip manufactures a variety of chips, Gartner's data show that Microchip microcontrollers shipped the world's first 8-bit microcontrollers ranked first in the world with a total of 45 sales offices, three factories, with 4,500 employees this time Trading will enhance Microchip's strength in the areas of computers, communications and the like.
However, this is only the latest case of chip industry restructuring, the chip industry mergers and acquisitions, Baotuan heating has lasted for a long time.
Data from financial data provider Dealogic show that in 2014, the global chip industry acquired 369 full-year mergers and acquisitions with a transaction volume of 37.7 billion U.S. dollars.
The figure continues to rise by 2015. According to a report released by the International Semiconductor Industry Association, in 2015, the global chip industry's M & A transactions exceeded 600 billion U.S. dollars at the time, and it was estimated that it would be 116 billion U.S. dollars in 2016 and 930 yuan in 2017 respectively One hundred million U.S. dollars.
The Broadcom acquisition of Qualcomm was also proposed in 2017, Qualcomm asked Broadcom the offer price to 160 billion US dollars, and covers Qualcomm 25 billion US dollars in debt, once the transaction is successful, this Will become the semiconductor industry's largest mergers and acquisitions history.
Although China's chip industry has made some progress in recent years, under the tide of global chip industry consolidation, Chinese enterprises are also under tremendous pressure.
Global chip industry mergers march
Dealogic data show that the number of chip companies since 2015, the number of mergers and acquisitions was 276 cases, compared with 369 cases in 2014, the number of chip companies mergers and acquisitions is on the decline, but the scale of a single merger transaction is even greater.
All-weather science and technology statistics found that in 2015, the world's largest mergers and acquisitions chip industry is Avago Technologies acquisition of Broadcom 37 billion US dollars in the transaction, the cash amounted to 17 billion US dollars, the stock value of about 200 billion US dollars.After the merger, the new company's Corporate value will reach 77 billion US dollars.
In July 2016, Softbank acquired ARM for 23.4 billion pounds (about 31 billion U.S. dollars) in one fell swoop, making it the # 2 semiconductor acquisition in the history of the semiconductor industry.
In just three months, the record was broken by Qualcomm.In October 2016, in order to expand the chip category, expand the scope of business, Qualcomm announced the acquisition of NXP for 47 billion USdollars, set a new record in the size of the chip M & A transactions.
In 2017, the size of individual acquisitions continued to rise, and in November last year Broadcom proposed a $ 103 billion acquisition of its peer Qualcomm at $ 70 a share, including $ 60 in cash and a $ 10 Broadcom stock.
Subsequently, Qualcomm rejected Broadcom's acquisition, saying the offer is too low, 'seriously underestimated' the value of Qualcomm some Qualcomm investors said Broadcom need to raise the purchase price to at least $ 80 per share. The acquisition of the tug of war between the commencement .
Recently, the Financial Times said Qualcomm has given up its intention to oppose being acquired by Broadcom, and is willing to reach an agreement on the chip business. Qualcomm also asked Broadcom to increase its offer to 160 billion U.S. dollars and cover Qualcomm's 25 billion U.S. dollars of debt Once the transaction is successful, it will become the largest M & A deal in the history of semiconductors and the new company will become a super giant, changing the existing pattern of the entire chip industry and making Broadcom the third-largest in the industry after Intel (48.98, 1.14, 2.38%) and Samsung Electronics, in the field of wireless communications chip will be in an absolute monopoly position.
Why blow up the wave of M & A?
For a long time, due to the slowdown in growth, rising costs and other pressures, chip makers through mergers and acquisitions, on the one hand access to new technologies, on the other hand to cut manufacturing, sales and development costs.
In 2015, Gartner predicted that the global semiconductor industry will see a decline of 0.8% in revenue in the same year, the first decline since 2012. According to the data of 2016, the revenue of the semiconductor industry was $ 339.7 billion, a decrease of 1.5% from 2015 The total revenue of the 25 largest semiconductor manufacturers increased by nearly 7.9% .This environment of low growth or even decline of the chip industry will not be improved until 2017.
But many of the chipmakers are high capital outflows but can not get high returns. Samsung, for example, uses about two-thirds of its capital expenditures in 2017 for semiconductors and nearly one-third for displays As S & P Global Market Intelligence data show, Samsung's investment in new facilities or existing facilities that make semiconductors, displays and other products has nearly doubled, so its capital expenditures in 2017 surpass those of PetroChina US dollar) and China Mobile (27 billion US dollars), topped the top 10 list of 2017 capital expenditures.
Samsung's profit growth has shown a 'weak' status.According to Samsung's 2017 fourth quarter earnings report, its operating profit of 15.1 trillion won (about 92.1 billion yuan), lower than the consensus of Reuters survey average Value (97 billion yuan).
In November 2017, Morgan Stanley (54.74, 0.25, 0.46%) still pointed out in its research report that due to the falling prices of flash memory chips, the chip industry has been nearing its peak.
Aware of this trend, chip companies are using mergers and acquisitions to reduce costs.Anwar high technology was then expected after its successful acquisition of Broadcom, from 2017 onwards, save $ 750 million per year cost.
There are even industry experts who say the reduction in the number of chip makers is expected to ease price competition and industry survivors could integrate complementary product lines, a situation that can cut sales channel inputs and manufacturers can sell large quantities for better synergy Working chip products.
On the other hand, for the acquirer, to a large extent it can help them expand their business scope, access to new technologies, and even to some extent against competitors.For example, through the acquisition of Cosemi, Broadcom can find a gap to further open the domestic chip market , At the same time, photodetector chips can make Broadcom fiber communications services in the further strengthening of Intel's acquisition of Altera gained the latter's FPGA technology, which can block ARM in the data center.
The International Semiconductor Industry Association also predicts that in the next ten years, the semiconductor industry is likely to enter the vertical integration stage from the horizontal integration to the vertical integration. From the horizontal to the vertical, the overall strength of chip manufacturers is getting stronger and the industry concentration is getting higher and higher , The pattern of oligopoly may be further strengthened.
China core or counter-attack
The worldwide tide of mergers and acquisitions has a far-reaching impact on the development of China's chip industry.
From the point of view of smartphones, IDC data shows that Huawei, OPPO and Xiaomi rush into the top five smart phone sales in 2017, except for Huawei. Other manufacturers' chip supply chains are highly dependent on foreign companies such as Qualcomm.
In January of this year, Qualcomm also announced that it has signed agreements with Lenovo, OpOpp, Vivo and Mi respectively MoU, the four companies said they intend to purchase Qualcomm value of not less than 2 billion US dollars RF front-end components within three years.
In the future, supply chain enterprises in the event of unexpected (such as mergers and acquisitions, product prices), China's major mobile phone manufacturers will be under attack even if Chinese companies can make some favorable conditions for the development of the domestic industry through mergers and acquisitions review, it is still difficult to stop the merger itself .
In recent years, with the double support of policies and funds, the development of China's chip companies has achieved some success.
In June 2014, the State Council promulgated the "Outline for Promoting the Development of the National Integrated Circuit Industry", which set a strategic target for realizing the leap-forward development of China's chip industry in a relatively short period of time.
Only two months later, 15 state-owned funds (hereinafter referred to as "big funds"), such as CDB Finance, China Tobacco and China Mobile, jointly set up a national fund for the design, testing and testing of the chip industry chain Wafer manufacturing and other key areas to provide financial support.
The initial plan of the fund is 120 billion yuan, and the actual fund-raising is nearly 140 billion yuan. At the same time, the total scale of the IC development fund set up by local governments at all levels has exceeded 300 billion yuan. In less than a year, the 'big fund' The project invested 40 billion yuan, including a number of leading companies in the domestic chip field, such as Ziguang, SMIC (6.66, 0.10, 1.52%), ZTE, Changjiang Electronics, etc. By the end of 2017, the National Integrated Circuit Industrial investment funds have invested over 70 billion yuan, of which about 60% of the funds to invest in semiconductor manufacturing.
According to statistics from the China Semiconductor Industry Association, China's IC industry achieved sales revenue of 433.55 billion yuan in 2016, up 20.1% over the same period of 2007. Among them, the chip design industry at the high end of the industrial chain continued its rapid growth with sales of 164.43 billion yuan, up Up by 24.1%.
The IC Insights report shows that among the top 50 global pure chip design companies, only one Chinese company, Huawei, is a Chinese company in 2009. In 2016, the number of Chinese companies entering the list increased to 11, including Hass, Spreadtrum, ZTE, Datang, NARI, Huawei, RDA, ISSI, Rockchip, All winner, Montage.
In 2017, China's chip industry also achieved some dazzling achievements: Huawei Haisi released the world's first 10-nanometer technology AI chips; equipped with a domestic chip supercomputer 'God of the Taihu Lake Light' won the world's super-field Three consecutive years; purple and Haisi ranks among the world's top ten chip design companies in the global top 50 chip design, Chinese enterprises accounted for 11 seats; Huawei also successfully used in high-end models a large number of HiSilicon Kirin chips, No longer controlled by people.
Compared with the international advanced chip technology, China's chip industry still has a certain level of development gap.With the advent of 5G era, China's chip industry in 2020 to completely get rid of dependence on foreign companies there are some difficulties.
According to an article from People's Daily on March 1, 'China Chip' is still facing many challenges if it wants a true counter-attack, one of which is the technology gap and the other is the weakness of the production level, but the article thinks 2018 will become China The key to the development of 5G chip, I believe that with strong policy support, coupled with the tireless efforts of domestic manufacturers, China 5G will surely lead the world in the near future.