The global semiconductor M & a market has witnessed a series of climaxes.
NVIDIA’s proposed acquisition of arm failed, but then amd (Chaowei semiconductor) announced the completion of its acquisition of Xilinx for about US $50 billion. On February 15, Intel announced that it would acquire tower semiconductor, a analog semiconductor foundry, with a total transaction value of about US $5.4 billion, at US $53 per share in cash. Intel’s acquisition will further expand its manufacturing capacity and global layout.
the dust of the largest M & A in semiconductor history is settled
Late at night on February 14, Beijing time, American semiconductor chip design giant amd (Chaowei semiconductor) announced that it had completed the acquisition of Xilinx, a programmable chip (FPGA) enterprise, in an all share transaction.
The acquisition was first announced in October 2020. The initial transaction valuation was US $35 billion. With the continuous rise of AMD’s share price, the transaction value is also soaring. As of the closing on February 14 Eastern time, amd closed at US $114.27 per share, with a total market value of US $137 billion.
Although amd officials did not disclose the specific value of the transaction, it is estimated that the valuation of the transaction has risen to US $49.8 billion (about 316.6 billion yuan), making it the largest M & A in the history of semiconductor in the world.
What is AMD’s intention to spend more than 300 billion yuan on the acquisition?
AMD is the world’s second-largest CPU (central processing unit) manufacturer after Intel. It is also one of the few GPU (graphics processor) suppliers in the world except NVIDIA. Xilinx, favored by AMD, is the inventor of FPGA, programmable SOC and ACAP, with a 50% share in the FPGA market.
After the acquisition of Xilinx, amd has gathered CPU, GPU and FPGA. In the future, it will strengthen the development of cloud computing, data center and other large computing platforms.
“Before, amd had two core businesses: CPU and GPU. Xilinx’s FPGA business can make up for AMD’s biggest weakness in entering the data center business. I judge that AMD’s future business focus will further focus on the data center business.” Teng ran, head of CCID Consulting integrated circuit industry research center, told China Securities Journal.
In 2015, Altera was incorporated into another leading FPGA company with us $16.7 billion. The completion of AMD’s acquisition of Xilinx means that the two largest companies in the field of FPGA have been integrated by semiconductor leaders. The global FPGA competition pattern will also produce new changes.
Teng ran introduced that AMD’s acquisition has obtained conditional permission from the Chinese market regulatory authorities to prevent amd from monopolizing the sales of FPGA in China in order to tie in its CPU and GPU products, and ensure that Xilinx FPGA and AMD chips are compatible with the products of other manufacturers.
Objectively speaking, there is still a considerable gap between the development level of FPGA enterprises such as China Shanghai Anlogic Infotech Co.Ltd(688107) and Xilinx. Wang Xiaolong, director of xinmou consulting and research, said, “China really has no platform enterprises like Intel and AMD to lead the industry in resource integration. With the acquisition of FPGA enterprises such as Xilinx, the future competitors of Chinese FPGA enterprises will be giants such as Intel and AMD, which is equivalent to a higher mountain in front of you.”
Intel plans to merge and expand the global OEM layout
On February 15, Intel announced that it would acquire Israeli Semiconductor Enterprise Tower semiconductor for us $5.4 billion. Intel CEO pat Kissinger said that this transaction will enable Intel to provide an extremely wide range of advanced nodes and provide differentiated expertise on mature nodes, which will help expand Intel’s OEM services and promote Intel’s goal of becoming a major OEM capacity supplier in the world.
Tower semiconductor has small revenue, but it is in a leading position in special processes. It has expertise in radio frequency (RF), power supply, silicon germanium (SiGe), industrial sensors and other professional technologies, and widely serves high growth markets such as mobile, automobile and power supply.
Intel said it plans to use cash on its balance sheet to realize the acquisition, which is expected to be completed within 12 months. At present, the transaction has been unanimously approved by the board of directors of Intel and tower semiconductor, and needs to be approved by some regulatory authorities in the future.
With regard to the frequent mergers and acquisitions in the global semiconductor industry, Teng ran said that March 2020 was the low point of the global semiconductor industry. However, with the rising prosperity of the industry and the market value of relevant enterprises constantly refreshing historical records, many companies now have very abundant cash flow. It is quite cost-effective to do some mergers and acquisitions in stock or other ways.
Wang Xiaolong believes that the M & a climax in China’s semiconductor field should not appear within two years, and more enterprises still hope to take the road of independent listing. With the differentiation of the market value of the secondary market and stricter protection of intellectual property rights, there will be more cases of M & A integration in the industry in the future.
