The Breker Trekker
Tom Anderson, VP of Marketing
Tom Anderson is vice president of Marketing for Breker Verification Systems. He previously served as Product Management Group Director for Advanced Verification Solutions at Cadence, Technical Marketing Director in the Verification Group at Synopsys and Vice President of Applications Engineering at … More »
Merger Mania and the Still-Changing Semiconductor Landscape
April 5th, 2016 by Tom Anderson, VP of Marketing
We try to cover a variety of topics here in The Breker Trekker blog, focusing on technical information but mixing in some general industry analysis as well. Two of our most popular posts of all time have involved the annual semiconductor supplier rankings from IHS, Inc. and the large amount of semiconductor industry merger and acquisition (M&A) activity over the last few years. IHS released their 2015 results yesterday, so it’s time for an update on both of these topics.
Let’s start by catching up on the M&A front. When we last covered this topic in January, the acquisition of Freescale by NXP and the acquisition of Altera by Intel had both just completed late last year. These closed in time to be reflected in the 2015 supplier rankings. There were several other deals from 2015 that were still pending and, while some of them have now closed, their effects will not be seen until the 2016 results are in.
Without further ado, let’s get to the numbers. As we have done in the past, we have compiled a table showing the IHS results for the Top 20 semiconductor vendors over the last ten years, including the new 2015 rankings:
There are quite few shifts in the Top 20 suppliers from 2015 to 2016, although some of them are only by a position or two. The most dramatic change occurred as the result of a deal mentioned above: NXP rose from number 15 to number 7 after its acquisition of Freescale, which disappeared from the rankings. Since Intel was already the perpetual top vendor, its acquisition of Altera increased its revenue but did not change its place in the rankings.
The IHS press release offered commentary on two other shifts: Qualcomm’s wireless revenue decline was not entirely offset by its acquisition of CSR (completed last August), and Infineon moved up a spot due to its acquisition of International Rectifier in early 2015. Avago continues to be a success story; last year it acquired Emulex and announced that it would acquire Broadcom, one of the deals that has now closed and will have a big impact on the rankings for this year.
In contrast, AMD’s revenue has been dropping as a result of the shrinking PC market and its ranking has suffered accordingly. Renesas is also facing challenges, enough so that there is speculation it may be an acquisition target. SanDisk saw a revenue decline and dropped several places, a situation that may cause complications for Western Digital’s plans to acquire it. An acquisition of Renesas or SanDisk (or AMD, for that matter), would clearly affect the 2016 semiconductor landscape.
That leaves Apple, which more than doubled its semiconductor revenue and jumped from number 23 last year to number 14 this year. You’re probably protesting, as we did, that Apple is not actually a merchant semiconductor vendor. IHS included Apple for the first time in its rankings for 2015, using the justification that such a major player cannot be ignored. The revenue used for the rankings is an estimate of the value of the Ax processor chips manufactured by TSMC. Since foundries are not included in this list, there’s no double-counting.
One significant deal announced last year has not yet closed: ON Semiconductor’s acquisition of Fairchild could have a small impact on rankings. As expected, semiconductor M&A activity continues in 2016 although most deals so far have been small and most of the interesting rumors have not (yet) panned out. Probably the highest profile moves are Sony acquiring Altair Semiconductor for $212 million and Cisco buying Leaba Semiconductor for $320 million.
However, we have three-quarters of 2016 left to go and we will likely see more major announcements that will reshape the semiconductor industry as we know it today. We will keep an eye on all the activity and publish a post summarizing the year so far when there’s enough worth highlighting. If we missed any major deals or if you have any thoughts on our coverage of this topic, please send your comments. As always, thanks for reading.
The truth is out there … sometimes it’s in a blog.
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