In the second half of 2020, the semiconductor industry ushered in a wave of mergers and acquisitions. Following NVda’s announcement in September of a $40 billion acquisition of CHIP IP giant ARM, AMD has also been reported to be buying FPGA (Field Programmable Gate Array, a field programmable logic array) leader for more than $30 billion.
Combined with the $20bn acquisition of Maxim by analog chip leader ADI in July, the semiconductor industry will have more than $90bn in acquisitions this year.
U.S. local time on October 8,media reported that AMD and Salings will reach an agreement as early as recently. However, the talks do not guarantee an agreement, especially given that they were suspended until they were recently restarted. Selings told First Financial reporters that he would not comment on rumors or speculation.
The fourth largest chip design company.
Against the backdrop of Intel and AD’s growing reach and expanding its business through acquisitions, AMD’s acquisition of Selings will undoubtedly enrich its product portfolio and strengthen its competitive advantage.
“AMD’s acquisition of Selings makes sense. AMD will have to make some acquisitions if it is to compete with Intel or Infinity. “An industry insider told First Finance, “AMD now has limited competitiveness in many markets, especially in some AI applications.” So AMD’s acquisition of Cyrus is also reasonable, because Selings in recent years in AI’s reasoning side layout is very positive, and Selings in 5G networks, industrial automation, autonomous driving and other fields have a good performance, can expand AMD’s business. “
Excluding Apple and Huawei, AMD’s acquisition of Salings would overtake Thering to become the world’s fourth-largest chip design company, the industry said.
LED by CEO Lisa Su, who took over in 2014, AMD turned the tide, doing well in both notebook and server processors and grabbing a share from longtime rival Intel.
Intel’s business is huge, with 48 buy-to-let acquisitions in the five-year period from 2014 to 2018, the largest of which was undoubtedly the $16.7 billion acquisition of Altera, the second-largest FPGA maker, and the $15.3 billion acquisition of Mobileye, the self-driving car company.
Today, AMD has to take in Cyrus, the FPGA’s biggest producer. Earlier, in an interview with First Financial, Victor Peng, president and CEO of Cyrus, said that as the FPGA’s leader, Celeste’s competitors were no longer Altera, but the processor businesses of NWDA and Intel.
FPGA is a product of further development based on programmable devices such as PAL and GAL. It appears as a kind of semi-customized circuit in the field of special integrated circuit, which not only solves the deficiency of custom circuit, but also overcomes the shortcomings of the limited number of door circuits of the original programmable devices. The world’s leading players today include Celestis, Altera, Lattice and Michommi. Even chip giants such as Intel, when designing chips such as CPUs, simulate and stream them on Selings’ FPGAs.
To better meet the challenges of the AI era, Selings also launched Adaptive Compute Acceleration Platform, an adaptive computing acceleration platform. ACAP is a highly integrated multi-core heterogeneous computing platform with a new generation of FPGA architectures for accelerating a wide range of applications, including video transcoding, databases, data compression, search, AI inference, genomics, machine vision, computational storage, and network acceleration.
However, FPGAs are difficult to program, and for developers, software development capabilities are required to understand digital circuits at the same time. Victor has told reporters that the biggest challenge for Selings is ease of use.
The above-mentioned industry insiders pointed out that AMD if the acquisition of Selings, how to integrate the implementation of the effect of 1 plus 1 greater than 2 is not easy, at least a year or two. “From Altera’s point of view, Altera’s overall performance after being acquired by Intel was not as good as I thought it would be. While Intel has also put a lot of effort into developing all hardware platforms, including FPGAs, with a unified software platform, software development, especially FPGA-equipped software development tools or suites, is not easy, and AMD’s investment is lower than Intel and N.VD.’s. “
On the other hand, communication networks are an important source of income for Selings. Selings has reduced Huawei’s revenue stream as a result of the U.S. Department of Commerce’s list of entities, and how AMD can address the current impact on Selings is a challenge.
The climax of mergers and acquisitions.
In the first nine months of this year, the semiconductor industry made more acquisitions than in any year since 2015, according to IC Insights, a market research firm.
2015 was the most acquired year for the semiconductor industry, with more than 30 deals worth $107.7 billion, followed by $100.7 billion in 2016 (of which $59.8 billion was completed in the following years, but deals such as Qualcomm’s acquisition of NXP failed to materialized).
Since then, semiconductor acquisitions have averaged about $25 billion to $30 billion a year as consolidation in the semiconductor industry has accelerated. It is worth noting that IC Insights’ list of acquisitions does not include deals with semiconductor equipment suppliers, material manufacturers, packaging and testing companies, and EDA Software.
If the Adidas, Analog Devices and AMD deals land, 2020 will easily surpass 2016 as the second year of the largest number of semiconductor mergers and acquisitions.
Before Inveda-ARM and Analytic Devices-Maxim, mergers and acquisitions in the semiconductor industry had all but stalled this year. Semiconductor mergers and acquisitions were only $1.8 billion in the first quarter of this year, according to IC Insights, and only $165 million in the second quarter, affected by the new crown pneumonia outbreak. In addition, U.S.-China trade frictions and governments trying to protect the domestic semiconductor industry have prevented some companies from trying to make large acquisitions.
Once Avda’s $40 billion deal to buy ARM is possible, it will be the largest semiconductor acquisition ever. But the deal will also face scrutiny in China, Europe and other markets. AmD’s acquisition of Selings also has more variables.