Slowing growth and rising costs have sparked a historic wave of mergers and acquisitions in the chip industry, according to the Wall Street Journal online. Semiconductor makers are seeking deals to streamline their structures and product lines.
Chip deals totaled $100.6 billion
So far this year, chip companies have announced $100.6 billion in deals, surpassing the $37.7 billion for all of last year, according to financial data provider Dealogic. While there have been 276 chip deals this year, down from 369 last year, there have been bigger deals, including The record $37bn acquisition of Broadcom by Anwar Technologies in May.
This year's chip deals are likely to get even bigger. Bloomberg reported last week that Analog Devices, Maxim Integrated Products, SanDisk and Fairchild Semiconductor International are in talks about various deal options. Representatives of the four companies declined to comment.
"It's either buy or sell," Alex Lidow, Eep's chief executive, summed it up. After 30 years leading chipmaker International Rectifier, Rideau co-founded Eep Power Conversion in 2007.
Acquisitions are aimed at reducing production costs
Chipmakers have long used acquisitions to acquire new technology, but the recent announcements resemble a wave of mergers in older industries aimed at cutting costs in areas such as production, sales and engineering. Anwar, for example, expects to achieve $750m in annual cost savings from 2017 following its broadcom acquisition. Anwar's deal with Broadcom was the world's largest technology deal until Dell announced its $67bn acquisition of EMC last week.
Market research firm Gartner forecast this month that global semiconductor revenue would fall 0.8 percent this year, the first decline since 2012. Global semiconductor sales will rise 1.9 percent to $344.1 billion next year, Gartner said.
