It seems that every month this year has brought news of some M&A activity in the chipset industry. However, the big deals ahead for semiconductor companies could be even more focused on the Internet of Things.
Larger companies are looking to incorporate discrete functions for chips that handle low-powered devices, or are designed for connected cars and other machines. Dealing with larger silicon companies can also make it easier for car and equipment vendors, and larger companies can also afford to plow money into R&D. "You want to be the supplier that has the most capability," Ernie Ruehl, managing director at Credit Suisse, told Reuters.
Credit Suisse advised NXP Semiconductors on its deal with Freescale Semiconductor and was one of the advisers to Avago Technologies in its $37 billion purchase of Broadcom.
Reuters notes that companies that make analog and mixed-signal chips are in demand, especially because chips process signals from sound and light, ideal for connected devices in and outside the home. Smaller firms like Maxim Integrated Products, Linear Technology, Intersil, Silicon Laboratories, Analog Devices and M/A-COM Technology could be takeover targets, Reuters reported.
Microcontroller makers like Atmel and Renesas might also be appealing companies to buy, since microcontrollers can be used in everything from connected cars to medical devices.
Deal making has been heating up this year in the chipset industry. So far this year, there has been $80 billion in semiconductor M&A, according to Reuters data. In the last two weeks alone, Avago and Broadcom announced their deal and Intel moved to buy Altera for $16.7 billion in a deal that will get Intel further involved in the market of silicon for network gear and data centers.
There have been some other IoT-related chip deals in the last year as well. In February, Intel struck a deal to buy Lantiq, a system-on-chip specialist focused on broadband access and home networking technologies, in a bid to get more deeply enmeshed in the smart home, one of the leading areas in the IoT market.
In October 2014 Qualcomm (NASDAQ:QCOM) said it agreed to buy British Bluetooth chipset specialist CSR for $2.38 billion (£1.56 billion), giving it a leg up in the connected car and IoT markets.
Companies are also unveiling their own internal IoT solutions. Last month Qualcomm's Atheros unit introduced two new IoT chipset lines. The QCA401x is designed to add intelligence to household appliances and even light bulbs, Raj Talluri, a Qualcomm senior vice president, said at the event. The other solution, the QCA4531, is designed to help companies that want to make hubs that coordinate communications among different devices.
Also last month Samsung Electronics unveiled its set of Artik-branded modules that contain the processors, memory, communications chips and software required for device makers to create connected devices.
- see this Reuters article
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