In 2020, global semiconductor mergers and acquisitions reached US$118 billion, setting a new record

IC Insights will release its latest version of the 2021 McClean Report - "Global Semiconductor Comprehensive Analysis and Forecast" later this month. Part of the new report focuses on specific data on mergers and acquisitions in the global semiconductor industry last year. 

In 2020, five major acquisitions and more than a dozen relatively smaller M&A transactions brought the total value of M&A for the year to an all-time high of $118 billion, surpassing the $107.7 billion in 2015 (see figure below).

The total value of the five largest mergers and acquisitions in 2020 (which took place in July, September and October) was US$94 billion, accounting for about 80% of the annual total.

Last year's global semiconductor M&A boom began in July when Analog Devices (ADI) announced that it would acquire Maxim Integrated Products (MIP) for $21 billion (primarily in the form of stock). Analog Devices expects the acquisition to be completed in the summer of 2021, and the acquisition will increase its market share in analog and mixed-signal ICs for automotive systems (especially self-driving cars), power management, and application-specific IC design. Before the announcement of the acquisition of MIP, the total value of semiconductor acquisitions in the first six months of 2020 was only $2.1 billion. The total value of mergers and acquisitions in the second quarter of 2020 was only $352 million, when the global economy had not yet recovered from the COVID-19 epidemic.

After completing some other smaller acquisitions in July and August, Nvidia announced in September that it would acquire ARM from Japan's SoftBank for a whopping $40 billion. For more than a decade, ARM has licensed almost all of the CPU technology used in smartphones and is expanding it into many other applications in Nvidia's product lineup, including data center systems, automotive automation, robotics, and machine learning and acceleration technologies. In order to allay the concerns of other industry competitors such as Qualcomm, Samsung, and Apple, Nvidia immediately promised to continue to maintain ARM's independence while licensing its IP to other semiconductor suppliers and system manufacturers. The acquisition is expected to be completed in March 2022, but must be approved by regulators in the United States, the United Kingdom, the European Union, South Korea, Japan, and China.

Four weeks later, October saw more large M&A deals. First, Intel announced the sale of its NAND flash business and 300mm wafer fab in China to SK Hynix in South Korea for $9 billion. In the last week of October, AMD announced the acquisition of Xilinx, a leader in FPGA technology, for approximately $35 billion (cash + stock), a deal that is scheduled to be completed by the end of this year. Also at the end of October, Marvell announced that it would acquire Inphi, a semiconductor supplier whose products mainly focus on mixed-signal analog, for $10 billion (stock + cash). The acquisition is expected to be completed in the second half of 2021.

It is worth noting that the IC Insights report focuses on the purchase agreements of semiconductor companies' business units, product lines, chip intellectual property (IP), and wafer fabs, but does not include semiconductor companies' acquisitions of software and system-level businesses. For example, the M&A list does not include Intel's acquisition of Israeli mobile application software provider Moovit for US$900 million in May 2020, mainly because the Israeli startup is not a semiconductor company. IC Insights' acquisition list also does not include transactions between semiconductor capital equipment suppliers, material manufacturers, chip packaging and testing companies, and design automation software companies.