A baker’s dozen of the deals that shaped 2020
Nonetheless there were deals aplenty including some blockbusters, although which ones can get beyond the US-China trade friction remains an open question. With the rising significance of the Chinese market it is increasingly the case that without the approval of the Chinese authorities a deal may not be worth doing.
Here is a list of 13 deals, in roughly chronological order, that broke on the pages of eenewsanalog.com in 2020.
1) SK Hynix buys into a foundry
South Korea’s SK Hynix Inc. is a major DRAM and NAND flash memory manufacturer but it has been concerned for a while that it needs to diversify into logic so that it is less prone to the rollercoaster ride of the memory market. In March 2020 SK Hynix moved in a small way acquiring an established business and fab (see SK Hynix buys MagnaChip foundry business, Fab 4).
2) NXP helps Globalfoundries
This isn’t an M&A deal but a piece of internal European business that became yet more significant later in the year.
As is well known Europe lacks leading-edge semiconductor manufacturing capability and the closest it gets to it is Intel in Leixlip, Ireland and Globalfoundries in Dresden, Germany. But for certain key components on-continent manufacturing is considered important. What to do as certain wafer fabs in Europe mature and become obsolete?
NXP Semiconductors helped Globalfoundries’ wafer fab in Dresden pass the necessary tests. In April the German Federal Office for Information Security (Bundesamt für Sicherheit in der Informationstechnik, BSI) certified the Globalfoundries’ site in Dresden meets the Common Criteria standard. This allowed Globalfoundries to produce chips for financial transactions, smart cards, digital ID and products for the public sector that require an extra level of security and integrity in the production process (see NXP helps GloFo gain European trusted manufacturing status).
3) The sound of money
There has been a scramble to get into the hearables market over the last couple of years. In June, wireless chipset vendor DSP Group Inc. (San Jose, Calif.) made a bid for a Swiss audio specialist SoundChip SA (Lausanne, Switzerland) who had been plying their trade independently (see DSP Group buys SoundChip for noise canceling expertise).
Next: From the UK to China
4) UltraSoC sold to Siemens/Mentor
In 2020 there has been a sell-off of UK startups and the first to go was UltraSoC Technologies Ltd., which in June was grabbed by Mentor Graphics, which in turn had been bought by Siemens in 2016.
Cambridge-based UltraSoC had developed technology for real-time monitoring and analysis of processing at the chip level, which can be useful for cybersecurity, functional safety and performance optimization. In some senses a merger with Moortec might have been a better outcome for the UK and Europe (see Siemens takes over UK chip-level analytics expert UltraSoc).
5) ADI moves to buy Maxim
In July, it was revealed that Analog Devices Inc. was in negotiations to buy Maxim Integrated Products. This was a second look as Analog Devices had also been interested back in 2016. In fairly quick order a deal was agreed that valued Maxim at $21 billion (see Analog Devices to pay $21 billion to take over Maxim) although it is not expected to close until mid 2021.
Whether the Chinese authorities feel disposed to block or enable the deal may depend on how initial contact goes between China and incoming US administration.
6) China buys German fabless chip company
Shenzhen Goodix Technology Co. Ltd. is not that well known in the west but happens to be one of the top ten fabless chip companies in China. In 2020 the European Union and national governments started to speak of the strategic significance of domestic semiconductor capability but sometimes it is harder speak louder than money. And so in August Goodix grabbed Dream Chip Technologies GmbH (Hanover, Germany), a company with a 30-year legacy going back to the formation of Sican by the government of lower Saxony in 1990 (see China’s Goodix completes acquisition of Dream Chip).
Next: A couple of big ones
7) ARM sell-off to Nvidia agreed
And now the deals started to pick up size and pace. After some speculation (see Samsung wants consortium, not Nvidia, to buy ARM) a deal was agreed for SoftBank to sell ARM to Nvidia (see ARM sale to Nvidia agreed at $40 billion). With a $40 billion price tag this would be the biggest M&A in the semiconductor sector.
But with US-China tension yet to be dialled down, the successful conclusion of the deal some time in 2021 is far from certain (see China likely to block Nvidia-ARM deal, says ex-Lenovo exec and Opinion: Nvidia’s bad deal is not yet done).
8) AMD set to buy Xilinx
In October, the rising star AMD made a $35 billion bid for Xilinx Inc., the inventor of the FPGA. There was a nice symmetry here because Intel had closed the acquisition of programmable logic vendor Altera Corp. in December 2015.
But whereas Intel’s star is on the wane as it struggles to keep pace in manufacturing with TSMC fabless AMD is waxing and the AMD-Xilinx combination will provide data center competition to Intel.
This deal is expected to conclude before the end of 2021 but like ADI-Maxim and ARM-Nvidia, depends on regulatory approvals (see AMD values Xilinx at $35 billion in take-over bid).
9) Allegro files for IPO
There were not too many IPOs in 2020 with reverses into previously established special acquisition companies being more popular. But one that managed to get away on Nasdaq was sensing and power semiconductor company Allegro MicroSystems Inc. (Manchester, New Hampshire) (see Allegro Microsystems files for IPO).
Next: Seeing out the year
10) Intel sells NAND flash memory business
Intel has a strange relationship to memory business and blows hot and cold. It is rumoured that although it is very enthusiastic about its 3D Xpoint non-volatile memory business it is selling chips at a loss. Meanwhile in October it announced its decision to bow out of NAND flash memory, albeit by a highly protracted arrangement with SK Hynix that will take until 2025 to complete (see Intel sells NAND memory business to SK Hynix).
11) Marvell snaps up Inphi
Another major deal, this time valued at $8 billion was the move by Marvell to acquire Inphi (see Marvell to pay $8bn for Inphi in cloud, 5G deal)
12) Moortec sold to Synopsys
Moortec, that other UK in-chip monitor company, was sold to EDA giant Synopsys Inc. in November 2020. Plymouth-based IP designer Moortec is known for its in-chip monitoring technology specializing in process, voltage and temperature (PVT) sensors. The opportunity for a match with UltraSoC was missed in favour of competition (see Synopsys buys Moortec to take on Mentor).
13) Indie Semi goes public via reverse takeover
The name Indie Semiconductor is not that well-known, The company is small one out of California but one that has been on top of multi-die component production and applying it to automotive semiconductors. Such is its pipeline of business that despite making a loss in 2019 and almost certainly 2020, it plans to go public via reverse into a listed acquisition vehicle (see Lossmaking Indie Semi to go public in $1.4 billion deal).
Whatever the fates throw at the electronics and semiconductor business, and humanity in general, there are always deals to be done and money to be made, or lost.
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