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Semiconductor industry to see more M&As

Posted: 19 Oct 2015 ?? ?Print Version ?Bookmark and Share

Keywords:power management chips? merger? acquisition? semiconductor industry?

The series of mergers and acquisitions in the consolidating semiconductor industry continues as the year enters its fourth and final quarter.

Analog Devices and Maxim Integrated are reportedly talking about a possible merger, while Fairchild Semiconductor hired Goldman Sachs Group to help the company find a buyer, according to unnamed sources interviewed by Bloomberg.

Analog Devices approached Maxim, which was working on a strategic review with a bank, the sources said. The two companies manufacture analogue chips and are rivals with Texas Instruments, which acquired National Semiconductor in 2011 to expand its market reach in the said product.

Maxim specialises in chips used in consumer electronics such as tablets and smartphones, while Analog Devices sell signal converters and amplifiers to industrial customers. The latter bought Hittite Microwave last year for $2 billion to be able to supply chips in the automotive and military sectors. It also acquired piezoelectric MEMS resonator start-up Sand 9 in June for about $30 million to $40 million.

Meanwhile, Fairchild is said to be in talks with potential buyers including ON Semiconductor and Infineon Technologies, Bloomberg's unnamed sources said, adding that neither a deal nor a transaction has been assured yet.

Fairchild, which has a market capitalisation of $1.89 billion, makes power components, automotive chips and signal converters. Like Analog Devices and Maxim, its biggest competitor is Texas Instruments, which has annual revenue that is about 10 times that of Fairchild's.

Infineon, which also manufactures power managements chips used in consumer and automotive electronics, bought International Rectifier in January for approximately $3 billion. The power chip company also plans to set up its second factory in China to get closer to its Asian customers.

All the companies involved, however, provided no details regarding the matter. Representatives from Maxim, ON Semi and Infineon declined to comment, while spokespersons for Analog Devices, Fairchild and Goldman Sachs did not respond to requests for comment, Bloomberg said.

The synergies happening in the semiconductor industry, which have already seen deals worth $110 billion this year, are due to rising costs and a dwindling customer base.

- Stephen Padilla

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