IC Industry M&A: Who's Left to Buy?

Junko Yoshida, EETimes
8/31/2016 09:11 AM EDT

MADISON, Wis. — Only eight months in, 2016 is already looking like another blockbuster year for M&A in the global semiconductor industry. The difference is that, while the number of deals is down, the size of some deals is huge, like Softbank's plans to buy ARM for $32 billion in cash.

As valuations keep going up, the questions now are who’s left to buy and what’s a good buy?

Slow overall chip market growth, rising cost, diminished venture capital investments in the semiconductor industry, and cheap interest rates are among the reasons tempting chip vendors to keep buying.

But as Rob Lineback, senior market research analyst at IC Insights told us, “There is a ‘hangover’ effect going on in 2016. Companies are still jockeying for position and responding to acquisitions announced in 2015.”

In other words, “The acquisition wave is still feeding upon itself.” Further, “Any company that failed in an acquisition bid seems to become a target for a takeover bid. It might take another year for this to settle down,” he concluded.

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