Ten deals that shaped analog, MEMS and sensors in 2019

Ten deals that shaped analog, MEMS and sensors in 2019
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Deals were plentiful in 2019
By Peter Clarke

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Consolidation in the electronics and semiconductor sectors diminished in 2019, partly hindered by US-China trade tension and the weakness of the general economy. Nonetheless there were deals aplenty, many focused on startups. Here is a list of eleven deals, in roughly chronological order, that impacted the analog, MEMS and sensors sector in 2019.

1) UMC bows to US pressure over China DRAMs

This is a deal that didn’t happen. Foundry United Microelectronics Corp. had found itself a nice gig helping Fujian Jinhua Integrated Circuit Co. develop DRAM technology but that had in turn attracted the attention of the US and a product ban in 2018. UMC therefore decided to move engineers off the project (see Report: UMC backs away from China DRAM venture).

2) Micron buys Intel out of memory JV

Back in January memory chip maker Micron Technology Inc. (Boise, Idaho) opted to buy out the interest of processor chip giant Intel Corp. in their joint venture IM Flash Technologies LLC (Lehi, Utah) at the earliest opportunity (see Micron triggers buy out of Intel JV).

The company had announced in October 2018 its intention to make the move some time after January 1, 2019 (see Micron to buy Intel out from manufacturing venture). The two companies had previously announced an end to their collaboration on phase-change memory, which the two companies have called 3D XPoint memory (see Intel, Micron end collaboration on 3D XPoint NVM).

3) Globalfoundries sells fab and MEMS business to Vanguard

In January 2019 Vanguard International Semiconductor Corp. (Hsinchu, Taiwan) said it had agreed to buy Fab 3E in Singapore from Globalfoundries Inc. (Santa Clara, Calif.) for US$236 million. The deal included buildings, facilities, and equipment and intellectual property associated with Globalfoundries’ MEMS business, which saw some contracts transfer over (see GloFo sells MEMS business, fab to Taiwan’s Vanguard).

4) Cypress forms South Korean memory JV

Cypress Semiconductor Corp. (San Jose, Calif.) announced that a joint venture with SK Hynix on the production of NAND flash memory had received regulatory antitrust approval and was expected to begin full operations on April 1, 2019 (see SkyHigh Memory flash joint venture to open in April). But that was not the end of matters for Cypress in 2019.

5) Renesas $6 billion deal to acquire IDT closes.

This deal also figured in last year’s list but these deals do take time to conclude. In March the news came through the US approved the deal (see Renesas gets CFIUS approval for $6 billion IDT buy) and the deal eventually closed in May 2019.

Next: Acquire or be acquired


6) On Semi buys Quantenna for $1 billion

On Semi was on an acquisition spree in 2019. The deal to acquire Quantenna was announced in March 2019 and closed June 21, 2019. Quantenna is being incorporated into On Semi’s analog business unit (see On Semi lays $1bn to buy Quantenna).

7) On Semi buys ex-IBM fab

On Semi was on a buying spree and Globalfoundries was looking to dispose of assets so there was a deal to be done. Globalfoundries Inc. (Santa Clara, Calif.) had acquired the 300mm IBM fab in East Fishkill in 2015. In April 2019 it announced it was selling it to On Semiconductor Corp. (Phoenix, Ariz.) for $$430 million (see On Semi buys ex-IBM fab from Globalfoundries). It was Globalfoundries second disposal of a wafer fab in the year.

The East Fishkill fab will be transferred to On Semi over three years. The first $100 million of the sale price was paid prior to the signing of the definitive agreement. The remaining $330 million is to be paid at the end of 2022, when On Semi will gain full control of the fab.

8) Infineon buys Cypress

Cypress had seemed a pretty secure company under the stewardship of CEO Hassane El-Khoury who had been in post since August 2016. But he was aware that the industry is perpetually in a state of flux along the lines of acquire or be acquired. While making plans to be an acquirer Cypress was in receipt of the proverbial offer too good to refuse from European chip firm Infineon (see Infineon to swallow Cypress in a move to expand product portfolio).

9) Intel buys itself an AI unicorn

Billion-dollar deals are normal in the semiconductor business but they are usually for well-proven companies. But Intel likes to invest in startups through Intel Capital to get early insight into how well some of them are doing. That was the case for Habana Labs Ltd. (Caeserea, Israel), a developer of deep learning accelerators for the data center. The purchase price is approximately $2 billion, Intel said (see Intel pays $2 billion for AI chip firm).

In previous years Intel had made similar moves on AI-oriented firms Movidius and Nervana. Intel expects the AI silicon market to be worth $25 billion in 2024 and its own AI-based revenue to be more than $3.5 billion in 2019 up 20 percent year-over-year.

10) AMS buys Osram

Austria’s mixed-signal firm AMS AG hankered after German LED manufacturer all year after the lighting company sent out an SOS in February (see Osram sends SOS, seeks investor).

But a series of offers for the company were not well received and AMS was forced to increase its offer under competition from an equity consortium comprising Bain Capital and The Carlyle Group. In October AMS tooks its bid to €4.6 billion (about US$5.1 billion) and Bain and Carlyle threw in their card. In December AMS secured more than 55 percent of he shares in Osram and took control (see Chip manufacturer AMS takes over lighting group Osram).

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