Archive for the ‘Mergers & Acquisitions’ Category
Wednesday, March 14th, 2018
Increased expectations for the DRAM and NAND flash markets spur upward revision.
IC Insights’ latest market, unit, and average selling price forecasts for 33 major IC product segments for 2018 through 2022 is included in the March Update to the 2018 McClean Report (MR18). The Update also includes an analysis of the major semiconductor suppliers’ capital spending plans for this year.The biggest adjustments to the original MR18 IC market forecasts were to the memory market; specifically the DRAM and NAND flash segments. The DRAM and NAND flash memory market growth forecasts for 2018 have been adjusted upward to 37% for DRAM (13% shown in MR18) and 17% for NAND flash (10% shown in MR18).
The big increase in the DRAM market forecast for 2018 is primarily due to a much stronger ASP expected for this year than was originally forecast. IC Insights now forecasts that the DRAM ASP will register a 36% jump in 2018 as compared to 2017, when the DRAM ASP surged by an amazing 81%. Moreover, the NAND flash ASP is forecast to increase 10% this year, after jumping by 45% in 2017. In contrast to strong DRAM and NAND flash ASP increases, 2018 unit volume growth for these product segments is expected to be up only 1% and 6%, respectively.
Tuesday, March 13th, 2018
Skyrocketing DRAM prices potentially open the door for startup Chinese competitors.
Historically, the DRAM market has been the most volatile of the major IC product segments. A good example of this was displayed over the past two years when the DRAM market declined 8% in 2016 only to surge by 77% in 2017! The March Update to the 2018 McClean Report (to be released later this month) will fully detail IC Insights’ latest forecast for the 2018 DRAM and total IC markets.
In the 34-year period from 1978-2012, the DRAM price-per-bit declined by an average annual rate of 33%. However, from 2012 through 2017, the average DRAM price-per-bit decline was only 3% per year! Moreover, the 47% full-year 2017 jump in the price-per-bit of DRAM was the largest annual increase since 1978, surpassing the previous high of 45% registered 30 years ago in 1988!
In 2017, DRAM bit volume growth was 20%, half the 40% rate of increase registered in 2016. For 2018, each of the three major DRAM producers (e.g., Samsung, SK Hynix, and Micron) have stated that they expect DRAM bit volume growth to once again be about 20%. However, as shown in Figure 1, monthly year-over-year DRAM bit volume growth averaged only 13% over the nine-month period of May 2017 through January 2018.
Figure 1 also plots the monthly price-per-Gb of DRAM from January of 2017 through January of 2018. As shown, the DRAM price-per-Gb has been on a steep rise, with prices being 47% higher in January 2018 as compared to one year earlier in January 2017. There is little doubt that electronic system manufacturers are currently scrambling to adjust and adapt to the skyrocketing cost of memory.
Tuesday, January 23rd, 2018
Numerous smaller deals were made but “megadeals” were scarce last year.
The historic flood of merger and acquisition agreements that swept through the semiconductor industry in 2015 and 2016 slowed significantly in 2017, but the total value of M&A deals reached in the year was still more than twice the annual average in the first half of this decade, according to IC Insights’ new 2018 McClean Report, which becomes available this month. Subscribers to The McClean Report can attend one of the upcoming half-day seminars (January 23 in Scottsdale, AZ; January 25 in Sunnyvale, CA; and January 30 in Boston, MA) that discuss the highlights of the report free of charge.In 2017, about two dozen acquisition agreements were reached for semiconductor companies, business units, product lines, and related assets with a combined value of $27.7 billion compared to the record-high $107.3 billion set in 2015 and the $99.8 billion total in 2016 (Figure 1). Prior to the explosion of semiconductor acquisitions that erupted several years ago, M&A agreements in the chip industry had a total annual average value of about $12.6 billion between 2010 and 2015.
Two large acquisition agreements accounted for 87% of the M&A total in 2017, and without them, the year would have been subpar in terms of the typical annual value of announced transactions. The falloff in the value of semiconductor acquisition agreements in 2017 suggests that the feverish pace of M&A deals is finally cooling off. M&A mania erupted in 2015 when semiconductor acquisitions accelerated because a growing number of companies began buying other chip businesses to offset slow growth rates in major end-use applications (such as smartphones, PCs, and tablets) and to expand their reach into huge new market opportunities, like the Internet of Things (IoT), wearable systems, and highly “intelligent” embedded electronics, including the growing amount of automated driver-assist capabilities in new cars and fully autonomous vehicles in the not-so-distant future.