Semiconductor global M&A activity 2013 to 2022:
The chart below summarizes the 10-year history of both M&A deal count and M&A deal value for transactions within the semiconductor industry with a deal value greater than $5 million. Note that the data includes deals completed as well as deals announced and in process as of November 2022. Therefore, the final figures for year-end 2022 may change.
As outlined in the chart, the 2022 global M&A deal activity for the semiconductor industry declined 23% from 31 to 24. However, the total deal value increased 14% from $51.6B to $58.8B.
Note that 5 pseudo mega deals dominated 2022 results:
- Topping the M&A deals in 1H22 was the AMD acquisition of programmable logic leader Xilinx for stock (initially valued at $35 billion).
- Next was a Chinese investment consortium agreement to take over the bankrupt semiconductor conglomerate Tsinghua Unigroup. The financially troubled company had significant debt as part of an effort to make China self-sufficient in several chip segments. In April 2022, government backed Beijing Jianguar Asset Management Co (JAC Capital) led a group of investment firms to complete a $9.4 billion injection into Tsinghua Unigroup, which runs Yangtze Memory Technologies (China’s first and leading domestic maker of NAND flash memory (ICs).
- The third largest chip acquisition agreement was Intel’s $5.4 billion deal to buy pure play wafer foundry Tower Semiconductor in Israel. The deal is expected to be completed in early 2023 and represents Intel’s push into the silicon foundry business and will provide locations in Israel, Japan, California, and Texas.
- In May 2022, MaxLinear announced an agreement to buy Silicon Motion in Taiwan for $3.8 billion in cash and stock. The deal is expected to finalize in 1H23 and will add controller ICs for NAND flash storage as well as RF and mixed-signal products to MaxLinear’s portfolio.
- The automation business of Azenta (formerly Brooks Automation) was acquired by Thomas H. Lee Partners, Barton Technology Ventures, and ICG Enterprise Trust through a $3 billion LBO on February 1, 2022. Barings provided debt financing in the form of first-lien and second-lien debt to support the transaction.
Top 10 transactions completed or in process:
| # | Deal Size $m | Date | Seller(HQ) | Description | Buyer(HQ) |
| 1 | 35,000 | Feb | Xilinx (US) | FPGA’s | AMD (US) |
| 2 | 8,182 | Jul | Tsinghua Unigroup (China) | Yangtze NAND flash memory | Investor Group (China) |
| 3 | 5,900 | Feb | Tower Semiconductor (Israel) | Specialty foundry | Intel (US) |
| 4 | 3,943 | May | Silicon Motion Technology (Asia) | Nand Flash Controllers | Maxlinear (US) |
| 5 | 3,000 | Feb | Brooks Automation (US) | Wafer handling robotics | Barton Technology Ventures, ICG Enterprise Trust (US) |
| 6 | 345 | Mar | Rigetti (US) | Quantum Computing | Supernova Partners Acquisition Company II (US) |
| 7 | 321 | Oct | SatixFy (Middle East) | Satellite Communication chips & software | Endurance Acquisition (US) |
| 8 | 300 | May | ECARX (Asia) | Auto hardware & software | COVA Acquisition (US) |
| 9 | 276 | Nov | Mobix Labs (US) | 5G Semiconductors | Chavant Capital Acquisition (US) |
| 10 | 246 | Aug | GenSIC Semiconductor (US) | Silicon Carbide | Navitas Semiconductor (US) |
Deals Canceled / Failed:
- Nvidia proposed $54 billion takeover of ARM canceled after facing anti-trust opposition by government regulators.
- GlobalWafers planned $4.89 billion takeover of German chip supplier Siltronic collapsed as the deal did not receive regulatory approval on time, although the door remained open to another attempt.
| # | Deal Size $m | Date | Seller(HQ) | Description | Buyer(HQ) |
| 1 | 54,222 | Feb | ARM (Europe) | Design & License Processors | Nvidia (US) |
| 2 | 4,923 | Feb | Siltronic (Europe) | Wafer Production | GlobalWafers (Taiwan) |
2023 outlook:
Industry analysts project that the semiconductor industry is expected to grow modestly next year by approximately 4%. However, the view on M&A activity remains mixed based on several factors.
Regulatory concerns:
On one hand government officials worldwide increasingly view the protection of intellectual property held by semiconductor manufacturers as crucial to national security. In recent years US and foreign regulators have blocked mergers and acquisitions involving companies with alleged links to the Chinese government. For example, Broadcom’s (Asia) 2018 withdrawal of its offer to buy Qualcomm (US), a transaction valued at $102 billion, fell through after then President Donald Trump moved to block it based on national security concerns. At the time, Broadcom was based in Singapore.
Regulatory resistance also contributed to NVIDIA (US) withdrawing its $50 billion offer to buy Arm (UK) from SoftBank. Because a wide range of companies and governments depend on Arm’s designs, global regulators were reluctant to allow a combination with another similar semiconductor company.
On the positive side, in February of this year, AMD (US) quickly secured approval for its $35 billion acquisition of Xilinx (US). In addition, SK Hynix (Korea) recently received phase one approval to acquire Intel’s NAND flash memory factory in China.
Intel, one of the few semiconductor companies that design and manufacture its own chips, is the industry’s most active acquirer, having announced 25 deals over the past 10 years with an average deal value of $1.7 billion. Going forward, we expect smaller transactions centered around acquiring specific talent and capabilities to become more of the industry norm.
Apart from strategic investors like Intel, new investors will likely play an increasing role in these smaller transactions. Private Equity and SPAC (Special Purpose Acquisition Companies) are expected to increase interest and activity in semiconductor M&A.
Government investment:
To relieve capacity constraints and ease supply bottlenecks, money is flooding into the sector from multiple sources. The Biden administration’s CHIPS for America Act earmarks $52 billion in federal investments to expand domestic manufacturing and reduce reliance on overseas supply. Note that $2 billion is specifically targeted for mature semiconductor manufacturing critically needed for the military and automotive manufacturing industries. The legislation also invests nearly $230 billion in a combination of semiconductor and other scientific long-term research & development. Taiwan’s TSMC, the world’s largest foundry on its own is investing $44 billion on new manufacturing facilities including a $12 billion plant in Arizona. Meanwhile, the Semiconductor Industry Association estimates that South Korea has committed $55-$65 billion for semiconductor investment over 3 years, the European Union $30-$50 billion over 10 years and China an incredible $170 billion over 10 years. We believe these investments will drive semiconductor M&A activity.
Strategic partnerships:
With mega deals becoming more difficult, some large companies are moving design in-house or developing partnerships to tackle supply challenges. Consider the following examples:
- Apple (US) has moved chip design in-house
- Ford recently announced a partnership with Global Foundries (US).
- Qualcomm and Samsung in July agreed to extend patent license agreements for a range of 5G and 6G technologies. This agreement will enable Samsung Galaxy products to operate with Qualcomm’s Snapdragon processors for a variety of applications.
Industry experts expect to see more long-term partnership agreements. It’s not classic M&A but it may provide more flexibility.
Charles Fay Managing Director – Electronics M&A
Charles has over 35 years of experience in Fortune 200 and investment banking in high-technology electronics. He has extensive knowledge in international supply chain and customer development, as well as a track record of success in over 100 electronics M&A transactions, covering integration, valuation, strategy, and buyer selection. Charles holds a BS in Electrical Engineering from Case Western Reserve University and an MS in Computer & Information Science from the University of Pennsylvania.
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