Value of semiconductor industry M&A agreements sets record in 2020, says IC Insights

Jessie Shen, DIGITIMES, Taipei 0

Five big acquisition announcements and more than a dozen smaller deals in 2020 pushed the total value of M&A agreements in the year to an all-time high of US$118 billion, surpassing the previous record of US$107.7 billion reached in 2015, according to IC Insights.

The five biggest 2020 M&A agreements - announced in July, September, and October - had a combined value of US$94 billion, which represented about 80% of the total for the entire year, IC Insights said.

Analog Devices announced in July it would buy Maxim Integrated Products for US$21 billion in stock, with the transaction expected to close by the summer of 2021. In September, Nvidia announced a US$40 billion megadeal to buy processor-design technology supplier ARM from holding company SoftBank, with the acquisition subject to approvals from regulatory agencies in the US, UK, EU, South Korea, Japan and China.

Four weeks after Nvidia announced the largest semiconductor acquisition in history, more large M&A agreements were announced in October 2020. It started with Intel announcing the sale of its NAND flash memory business and 300mm wafer fab in China to SK Hynix for US$9 billion. In the last week of October 2020, AMD announced an agreement to buy programmable logic leader Xilinx for about US$35 billion in stock, with the deal scheduled to be completed by the end of this year. Also at the end of October, Marvell Technology announced it would acquire high-speed interconnect and mixed-signal IC supplier Inphi in Silicon Valley for US$10 billion in stock and cash, with the acquisition expected to close in the second half of 2021.

Semiconductor acquisition agreements in the first six months of 2020 had a combined value of just US$2.1 billion, IC Insights indicated. The M&A total was only US$352 million in the second quarter, when the opening surge of COVID-19 virus crisis was sinking the entire global economy.

The top-5 acquisition agreements in 2020 were among the largest of the 51 semiconductor M&A deals made over the past 21 years that were valued at US$1.0 billion or more, according to IC Insights. More than half of the top 51 semiconductor industry acquisition agreements - 32 of them - have occurred in the past six years (2015-2020).