The semiconductor sector is one of a handful of markets that has been heavily embroiled in merger/acquisition activity over the past decade or so. Who are the major players at the start of this new year? What's already on the cards, and what else is likely to emerge over the coming months?

The major players, excluding Samsung and Softbank - as their semiconductor businesses are only a part of their total portfolio - are (in alphabetical order):

* Analog Devices, with a market capitalisation of about $33 billion. Its last deal was for Linear Technology, which was completed in early 2017 for about $30 billion. It also made a bid for Maxim Integrated in 2016, which didn't materialise.

* Broadcom (formerly Avago Technologies), with a market capitalisation of about $110 billion. It is hoping to close its $38 billion bid for NXP this quarter and is currently pursuing the acquisition of Qualcomm in a deal valued at well over $100 billion. This is on top of its $5.9 billion acquisition of Brocade Communications Systems in 2017. Avago, which has roots based in the rich technical heritage of technology powerhouses such as AT&T/Bell Labs, Lucent and Hewlett-Packard/Agilent, originally bought out Broadcom for $37 billion in 2015/16, but decided to retain the Broadcom name.

* Infineon, based in Germany, with a market capitalisation of about $31 billion.

* Intel, with a market capitalisation of about $216 billion. It bought Mobileye last year for $15.3 billion, and is one of the favourites to add to its portfolio in the near future.

* Micron Technology, with a market capitalisation of about $51 billion. Its last take-over was that of Inotera Memories for $4 billion in late 2016.

* Nvidia, with a market capitalisation of about $117 billion, but no acquisition history. It is deemed to have a two-year lead in autonomous driving.

* NXP (formerly Philips), whose latest acquisition was that of Freescale Semiconductor for about $40 billion in 2015.

* Qualcomm, with a market capitalisation of about $94 billion and currently in litigation battles involving Apple, among others.

* Taiwan Semiconductor, with a market capitalisation of about $197 billion, but with no acquisition history.

* Texas Instruments, with a market capitalisation of about $103 billion. Its last deal ($6.5 billion) was in 2011 for National Semiconductor, although it also made a bid in 2016 for Maxim Integrated, which didn't come to fruition.

Do not rule out some of these smaller companies merging among themselves.

The smaller players include AMD, Cirrus Logic, Cypress Semiconductor, Global Foundries, Integrated Devices Technology, Lattice Semiconductor, Maxim Integrated, Micron Technology, ON Semiconductor and a host of other organisations, such as Teradyne, which are heavily involved in supporting the semiconductor producers. These are all potential targets for acquisition by the bigger boys. Nevertheless, do not rule out some of these smaller companies merging among themselves, especially following the chip security scares currently floating around the industry.

In addition, Cirrus Logic is heavily dependent on Apple, as are several other companies, and some of them may try to alleviate that potential fragile situation.

Not surprisingly, the new opportunities for semiconductors are associated with artificial intelligence, the autonomous driving space and the Internet of things, and these market initiatives are likely to accelerate further research investment and demand.

Intel and Nvidia are already seen as leaders in these new spaces and therefore are the companies to watch. However, one should not forget Softbank, which paid $24 billion for Arm Holdings in 2016, and Samsung, whose semiconductor business is a major part of its total revenue. The latter overtook Intel in Q317 to become the largest semiconductor company by revenue.

In addition, the Chinese are trying to get in on the act and money doesn't seem to be an issue. Canyon Bridges' recent attempt to buy Lattice Semiconductor was blocked by the US, but it did manage to take over UK-based Imagination Technologies, so watch out for more activity from that part of the world.

By: DocMemory
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