20 deals that shaped analog, MEMS and sensors in 2016
And so we have expanded a top 15 deals list to a top 20 laid out in roughly chronological order – and the year isn’t over yet!
1) Qualcomm forms RF joint venture with TDK
The year started pretty much in the spirit that it was going to continue, with the announcement of a $3 billion plan to form RF360 Holdings from two protagonists that would be heard of latter in the year (see Qualcomm, TDK prep $3bn RF joint venture).
2) Sony buys Altair for LTE
Also in January Sony made a move on one of the most successful of Silicon 60 startups. It offered over $200 million but whereas Altair has previously tried to sell LTE into mobile phones Sony appears to be interested in wireless technology of IoT (see Sony buys Altair to get LTE for IoT).
3) Qorvo buys GreenPeak
Qorvo Inc. is an RF chip company created out of the merger of RF Microdevices and TriQuint at the end of 2014. GreenPeak Technologies NV was a short-range wireless company formed by the merger of Dutch company Xanadu Wireless and the Belgian company Ubiwave in July 2007. Now they are one (see Qorvo buys wireless IoT specialist GreenPeak).
4) AMS buys and buys and buys
Austria’s AMS AG was active in 2016 with a number of smaller acquisitions so we have listed them all together. The first was for Cambridge CMOS Sensors in June, followed by Mazet in July. The largest deal is potentially worth $850 million for Heptagon Pte. Ltd. of Singapore. (see AMS buys Cambridge sensor startup, AMS acquires MAZeT for color, spectral sensing and AMS to pay up to $850 million for optical business).
5) China buys an Italian fab
Semiconductor Manufacturing International Corp. (SMIC) is China’s largest dedicated semiconductor foundry and potentially part of a campaign by the Chinese state to buy its way into prominence in the global semiconductor industry. However in June SMIC announced a relatively low cost deal to acquire a 70 percent stake in specialty foundry LFoundry SRL for about $55 million. (see SMIC buys Italian chip foundry).
Next: From Munich to Grenoble
6) Infineon buys Cree’s Wolfspeed
Silicon carbide and gaining expertise and market position with the material was a theme of 2016 and Infineon Technologies AG moved to buy the Wolfspeed power and RF division of Cree Inc. (Durham, North Carolina) for $850 million in July (see Infineon to buy Cree’s Wolfspeed SiC business).
7) Infineon sees value in lidar
Infineon also moved in the lidar sensor business later in the year buying Dutch fabless MEMS company Innoluce NV (see Infineon acquires lidar expertise through Innoluce takeover).
8) Japan’s Softbank buys ARM
This was perhaps the most unexpected deal of the year and the one that could signpost the biggest change in the digital electronics landscape. ARM has built up a commanding position with its intellectual property business model and its financial results were proving almost unshakeably good quarter after quarter but even so the size of Softbank’s offer surprised. It was £24.3 billion (or about $32.25 billion) in an all-cash deal (see ARM agrees to be bought by Japan’s Softbank).
Softbank CEO and founder Masayoshi Son believes the best is yet to come for ARM with the Internet of Things providing even greater opportunity than the smartphone revolution. Others think that ARM may have cashed out at the top of the market with the rise of open-source hardware that is more flexible and can come royalty-free on the horizon (see ARM-SoftBank: Selling at the top or buying at the bottom?).
9) Analog Devices goes straight to Linear
Almost as big as the Softbank-ARM deal is that hatched by Vincent Roche, CEO of Analog Devices to acquire Linear Technology Corp. for $14.8 billion in cash and stock. (see Analog Devices to buy Linear Technology).
10) TDK picks up Tronics
Through its Epcos AG subsidiary TDK has made an offer to buy French MEMS developer and manufacturer Tronics Group for about €50 million (about $55 million). (see TDK bids to buy MEMS maker Tronics).
Next: From Japan to Paris
11) Renesas offers $3.2 billion for Intersil
Japan’s leading semiconductor company Renesas has been through some hard times but it remains a force in automotive electronics. To strengthen its hand it made a bid for analog and power management specialist Intersil Corp. by offering $3.2 billion (see Renesas agrees to pay $3.2 billion for Intersil).
12) OnSemi buys industry icon
In some ways this was a 2015 deal. That is when the offer was first made but uncertainty lingered when a Chinese bid was received and then rejected in February 2016 (see Fairchild rejects Chinese takeover bid). On Semi was finally cleared to acquire Fairchild at the end of August for about $2.4 billion after it had disposed of its planar insulated gate bipolar transistor, suppression diode and thyristor businesses to Littelfuse Inc. for $104 million (see On Semi clear to buy Fairchild).
13) Intel buys into machine learning
Intel buying Irish fabless chip company Movidius Ltd. might seem like a purely digital play but Movidius, which had started out in DSP for video on smartphones, had been moving into computer vision and machine learning for some time. And machine learning was definitely one of themes of 2016. Intel’s vision is for Movidius to provide the “visual cortex” that complements the eyes (cameras) and brain (CPU).
The Nervana Systems buy was aimed at hitting back at Nvidia which was starting to make in-roads into data centers with machine learning on GPUs (see Intel buys Movidius to ramp computer vision and Intel to Acquire Deep Learning Nervana).
14) Qualcomm takes NXP/Freescale
Qualcomm taking the recently-formed NXP/Freescale combination out of the hands of private equity for $47 billion was announced in October and is the largest takeover in the semiconductor industry to date. It will change the semiconductor pecking order in a number of areas, not least automotive. And vision of autonomous driving aided by wirelessly connected and sensor-laden vehicles was another of the trends of 2016.
Qualcomm’s move is indicative of a number of other trends in the industry: consolidation because the cost of money is low; the need for many companies to get away from the vanishingly thin margins of the now saturated mobile electronics market; multinational companies have so much money offshore avoiding paying tax they might as well spend it on purchases (see Qualcomm’s NXP takeover will shake up automotive chip world and Qualcomm, NXP acquisition will not be easy).
15) X-Fab lifts Altis out of insolvency
Europe doesn’t have too much chip manufacturing left and Altis was one wafer that was withering on the vine but that may now find useful endeavour. Altis, located at Corbeil-Essonnes in the southern suburbs of Paris, has a pedigree dating back to IBM building a plant there in 1986 to make bipolar circuits for 3090 mainframes. Thirty years and many owners later analog, mixed-signal and MEMS foundry group X-Fab Silicon Foundries AG (Erfurt, Germany) announced it buy the assets of Altis Semiconductor out of insolvency (see X-Fab to swallow Altis Semiconductor).
Next: Hello China, Goodbye English Electric
16) China likes Lattice
On November 4 FPGA vendor Lattice Semiconductor Corp. (Portland, Ore.) announced it had agreed to be bought by a Palo Alto based private equity company for about $1.3 billion. As we pointed out at the time, and as others only noticed later, Canyon Bridge Capital Partners Inc. (Palo Alto, Calif.) is essentially a Chinese financial vehicle and possibly an instrument of Chinese state policy to hoover up the semiconductor industry (see Lattice Semi to be sold to China-backed private equity).
17) Siemens reinvents with Mentor
At first sight and with Siemens offering $4.5 billion this seems an unlikely pairing. Siemens is a leading European conglomerate that provides power, industrial and medical infrastructure and equipment. Mentor Graphics is a 35-year old EDA software company. But although Mentor started out in design automotion of integrated circuits it has increasingly focused on other aspects of design including PCB and system, mechanical, thermal alongside electronic and up to operating systems and software. It’s customer base in automotive, industrial and aerospace is a good fit with the hot areas du jour and Siemens plans to reinvent itself and a trend towards delayering of the supply chain (see Siemens pursues Industry 4.0 with Mentor Graphics buy).
18) Macom, Applied Micro
Macom Technology Solutions Holdings Inc. (Lowell. Mass.), a vendor of radio, microwave and millimeter-wave ICs, has announced an agreement to acquire digital fabless chip company Applied Micro Circuits Corp. (Sunnyvale, Calif.) for $770 million (see Macom in buy-and-sell deal with Applied Micro).
19) President Obama blocks German deal
Despite the rise and rise of China and southeast Asia more generally in electronics and semiconductor the US market still counts for a lot. This has been the reason why legal and patent battles were fought in the US; the thinking being that if you were excluded from the US market you might as well give up on the global market. That thinking is being tested.
MOCVD equipment maker Aixtron SE (Herzogenrath, Germany) tried to resist a recommendation by Committee on Foreign Investment in the United States (CFIUS) that it drop the sale of the company to China-controlled Grand Chip Investment GmbH for about $700 million.
The matter was referred to President Obama who has issued a Presidential Order prohibiting aspects of the deal. It is limited to the US business and does not prohibit the acquisition of Aixtron SE shares and ADSs by Grand Chip Investment but the ban on the use of US patents and not include US operations could be an effective block on the deal (see President Obama blocks Chinese bid for Aixtron).
20) Goodbye English Electric Valve
Industrial conglomerate Teledyne Technologies Inc. (Thousand Oaks, Calif.) has agreed to buy specialty image sensor and semiconductor manufacturer e2v technologies plc (Chelmsford, England) for about £620 million (about $785 million) in cash. The company began in the early 1940s as a part of the Marconi group manufacturing magnetrons for radar systems. It was also the name behind the English Electric Lightning supersonic jet fighter before becoming e2v and a specialist in imaging sensors. In 2006 it purchased the Grenoble, France facility from Atmel Corp. and in 2008 acquired QP Semiconductor a US-based supplier of semiconductor components used in military and aerospace applications. In 2014 e2v acquired AnaFocus, a developer of specialist CMOS imaging products (see Teledyne to buy UK’s e2v).
Related links and articles:
15 deals that shaped analog, MEMS and sensors in 2015
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