Chip M&A deals back to lower levels after 2020 boom
It is also similar to the number achieved in the first eight months of 2020 but that year was marked by a spike of activity in the second half to $117.9 billion, as the industry caught up with opportunities put on hold by the Covid-19 pandemic.
Value of semiconductor industry mergers and acquisitions by year. Source: IC Insights.
The strong momentum carried over into 1Q22 with purchase agreements for chip companies, business units, product lines, and related assets reaching a total value of $15.8 billion in 1Q21. However, the pace of semiconductor acquisition agreements fell back over the next five months of 2021.
The combined value of semiconductor M&A agreements announced in the first eight months of 2021 was slightly below the total for the same periods in 2019 and 2020 ($24.7 billion and $23.4 billion, respectively).
The last four months of 2020 saw four megadeals announced: Nvidia’s planned $40 billion acquisition of processor IP licensor ARM; Advanced Micro Devices’ pending $35 billion purchase of FPGA leader Xilinx; Marvell Technology’s now completed $10 billion takeover of interconnect chip supplier Inphi; and Intel’s announced $9 billion sale of its NAND flash business and 300mm fab in China to SK Hynix. Three of these four 2020 megadeals are still waiting for regulatory clearance, including China’s approval in the midst of its trade war with the US. Chinese inaction over the planned takeover of NXP by Qualcomm eventually scuppered that deal.
Deals that could boost 2H21 include a $30 billion acquisition of Globalfoundries by Intel to boost its foundry aspirations and a $20 billion takeover of Kioxia by Western Digital.
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