Semiconductor Billion Dollar Deals Are Back

Despite the global pandemic still being a threat to our health and economy, the chip industry seems to be doing well again. Recent news indicate that the semiconductor industry is on the upswing.[1] In the past few months, the chip producers had held back with large deals. Now it seems like billion dollar deals are picking up everywhere in the industry.

This summer, the US semiconductor manufacturer Analog Devices took over rival Maxim Integrated Products for almost $ 21 billion in shares.[2]

Nvidia recently announced the acquisition of one of the most important companies in the smartphone industry, the British chip designer Arm – for 40 billion dollars.[3]

It is no coincidence that such significant takeovers are taking place in the chip industry in particular. So far, the industry has come through the economic crisis relatively lightly. According to the latest reports (SEMI), by the end of June, sales had increased slightly worldwide despite Corona.[4]

The demand for electronics has actually increased, due to the fact that people around the world are working at home in view of the pandemic and stock up on the necessary equipment. There has also been a significant increase in the need for semiconductors in the healthcare market, for next generation medical devices, most notably this year. [5]

Unfortunately, semiconductors have been making news as a political weapon in the past few months. Takeovers in the semiconductor industry are almost always a political issue. Cellular networks and semiconductors are critical to national security. For US President Donald Trump, protecting native technology is high on the agenda. [6]

The truth is that all chip manufacturers depend on good relations with China. China is by far the most important market for producers, and it is becoming more important every year.

Chinese companies are looking to develop more homegrown chips in response to a recent tightening of rules by the US.[7]

The US and China face each other in a new strategic rivalry that will last well beyond the Covid-19 pandemic and Donald Trump’s term in office. No company or investor can afford to ignore the conflict.

From 5G smartphones and electric cars, to artificial intelligence and cloud services: semiconductors are the engine driving the digital transformation of the economy.

It will be interesting to see what transpires in the semiconductor industry in the last quarter of this eventful year.

Do you have any predictions? Leave us a comment below.


[1]Lapedus, Mark (2020, September 17). Upturn Seen In Semi Equipment Biz. Retrieved from https://semiengineering.com/upturn-seen-in-semi-equipment-biz/

[2]Reuters. (2020, July 15). Chipmaker Analog Devices to buy Maxim Integrated in an all-stock deal worth $21 billion. Retrieved from https://www.cnbc.com/2020/07/13/chipmaker-analog-devices-to-buy-rival-maxim-integrated-in-an-all-stock-deal.html

[3]King, Ian (2020, September 13). Nvidia is buying SoftBank’s Arm chip division in biggest semiconductor deal ever. Retrieved from https://fortune.com/2020/09/13/nvidia-softbank-arm-chip-semiconductor-deal/

[4]Rosso, Dan. (2020, August 3rd). Global Semiconductor Sales Increase 5.1 Percent Year-to-Year in June; Q2 Sales Down Slightly Compared to Q1. Retrieved from https://www.prnewswire.com/news-releases/global-semiconductor-sales-increase-5-1-percent-year-to-year-in-june-q2-sales-down-slightly-compared-to-q1–301105127.html

[5]Semiconductor Review. (2020, September 5). Is Semiconductor Technology the heart of next gen medical devices? Retrieved from https://www.semiconductorreview.com/news/is-semiconductor-technology-the-heart-of-nextgen-medical-devices–nwid-113.html

[6] Sneider, Daniel. (2020, September 13). Everyone Wants to Crack Down on China—Except Silicon Valley. Retrieved from https://www.wired.com/story/crack-down-china-except-silicon-valley/

[7]SHUJING, He and YELIN, Mo. Caixin. (2020, September 16). In depth: China chip sector has money, now it just needs workers. Retrieved from https://asia.nikkei.com/Spotlight/Caixin/In-depth-China-chip-sector-has-money-now-it-just-needs-workers

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