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Posts Tagged ‘Mergers’

Mobile System on Chip Designs, Embedded Processing Lift MPU Market

Thursday, February 1st, 2018
Though accounting for less than half of total MPU sales, data-handling cellphones, tablets, and MPUs for embedded processing applications to keep MPU market active through 2022.

Microprocessors, which first appeared in the early 1970s as 4-bit computing devices for calculators, are among the most complex integrated circuits on the market today.  During the past four decades, powerful microprocessors have evolved into highly parallel multi-core 64-bit designs that contain all the functions of a computer’s central processing unit (CPU) as well as a growing number of system-level functions and accelerator blocks for graphics, video, and emerging artificial intelligence (AI) applications.  MPUs are the “brains” of personal computers, servers, and large mainframes, but they can also be used for embedded processing in a wide range of systems, such as networking gear, computer peripherals, medical and industrial equipment, cars, televisions, set-top boxes, video-game consoles, wearable products and Internet of Things applications.  The recently released 2018 edition of IC Insights’ McClean Report shows that the fastest growing types of microprocessors in the last five years have been mobile system-on-chip (SoC) designs for tablets and data-handling cellphones and MPUs used in embedded-processing applications (Figure 1).

Figure 1

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Value of Semiconductor Industry M&A Deals Slows Dramatically in 2017

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.


Figure 1

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.

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