What's Driving This New Wave of Semiconductor Merger Mania?
Nvidia/ARM $40B. AMD/Xilinx $35B. Marvell/Inphi $10B. Despite the disruption of COVID, a wave of high value semiconductor acquisitions is sweeping the industry. Why? Did something happen that stimulated this consolidation? Until 2015, the industry was experiencing continuous “de-consolidation” that started in 1965. Combined market share of the top 50 companies steadily decreased as small companies entered the market and grew to displace the previous leaders.
Even today, only one company, TI, has remained in the Top 10 since the 1950s. Growth prior to 2015 was largely organic rather than by acquisition. In 2015 and 2016, the consolidation generated by acquisitions of Broadcom, Freescale, Altera, Linear Technology and ARM provided a temporary burst in acquisition activity. Analog Devices’ July 2020 announcement of a proposed acquisition of Maxim, however, seems to have been a precursor to a new wave. Following are some possible differences in the industry today that might be driving this recent merger mania.
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