The development of the global semiconductor industry is still good, and corporate mergers and reorganizations continue. After a wave of waves, Toshiba’s chip acquisitions have yet to be finalized, and Broadcom or Qualcomm has been acquired. The largest acquisition may be renewed.
Although the global semiconductor growth is less than 5%, related companies also believe that the semiconductor output value is very large, even if 5% is not a bad growth, the main reason is that semiconductor is a very large industry, from the perspective of supply and demand, the demand unit Wafers do increase. On the other hand, the unit price is more critical. If the unit price declines, it will be detrimental to the industry, but this year from the demand side, no matter if it is IoT, Smart-Driving, Robot, etc., there are many new applications and there is no need to see the demand. Drop it.
The continued restructuring of the semiconductor industry is related to the maturing of the industry. Industry insiders pointed out that at present, it seems that they are all moving in the right direction. After the leading manufacturers have further divided their departments and focused on their respective fields, the leading manufacturers are actually pursuing the improvement of operating profit ratio and gross profit, not The pursuit of bargaining, these represent the positive development of the semiconductor industry.
Toshiba chip acquisition and production of moth
On October 24, Toshiba’s shareholders approved the sale of the subsidiary’s chip business to a consortium represented by Bain Capital. The transaction price was US$17.5 billion. The deal was met with fierce opposition from its partner, Western Digital, who had filed a lawsuit and hoped that the court would ban the deal. WD stated that the transaction violated their cooperation agreement.
In this regard, the buyer Bain Capital could not sit still. Its managing director, David Gross-Loh, said in an external interview that Western Digital’s prosecution was based on its distortion of its rights and that there was no threat to Western Digital's business. At the same time, he warned Western Digital that if he insists on prosecution, he may not purchase flash chips. However, Western Digital has not responded to the warning from David Gross-Loh.
Broadcom or acquisition of chip giant Qualcomm
In the few cases of Toshiba's chip acquisitions, another big chip giant is also facing the acquisition. According to overseas media reports, chip giant Qualcomm is facing Broadcom’s acquisition and the market’s estimated bid price will exceed US$100 billion.
According to specific news, Broadcom will purchase Qualcomm at a price of US$70 per share for a total of US$100 billion. This news broke out, Qualcomm shares rose 13% the same day, and Broadcom also rose 5.5%. If this acquisition is reached, it will become the largest transaction in the history of the chip. Once the acquisition of Qualcomm is successful, Broadcom will become the overlord in many fields. The chip business of consumer electronics products will be a huge blow.
The reason for the frequent occurrence of chip acquisition
Whether it is Toshiba chips or Qualcomm, the acquisitions in the semiconductor market have continued in recent years, and records have been updated again and again. The reason is that Moore's Law is one of the important factors.
Previously, the logic behind Moore's Law was that the semiconductor industry needed to grow at a suitable rate to maximize profits. As Moore's Law slowly lapses, the semiconductor industry is gradually becoming more and more like the traditional industries such as steel and petroleum. The threshold for entry is high and the demand for capital is high.
The ultimate driving force behind Moore's Law is actually economic factors. For large companies, the increasing capital required for advanced processes means that the risk of developing new products is also increasing. More and more companies' strategies in the market have gone from being desperate to make new products and competitor's death to becoming less risky in the market. Thus, with the post-2008 capital easing, we saw in the past two years the company's unprecedented mergers and restructuring of the semiconductor industry.
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