2015 Mergers, acquisitions and change in the global electronics industry

-June 02, 2015

Recent big deals that are changing the face of electronics globally include the final blow to what once was the US telecom infrastructure unit of AT&T—Lucent Technologies---Alcatel-Lucent and now Nokia. I have personally lived this journey when I was Global Account Manager/Apps engineer for Burr-Brown and then TI for AT&T on through to Alcatel-Lucent from 1990 to 2010.

Then there is the impending transformation of Ericsson into a software company with huge layoffs all in Sweden by the end of June 2015 to the tune of 2,200 people being affected there in R&D and supply divisions. This may impact the large Power supply module group of Ericsson. Is there an acquisition in the air here too?

There is also the NXP acquisition/merger of Freescale which in turn spun another announcement with the sale of the NXP RF group to Chinese state-owned investment company Jianguang Asset Management Co. to help fund the acquisition/merger of Freescale and NXP. This needed to be done to avoid regulatory issues since the combined RF groups of NXP and Freescale would control somewhere in the area of 75% or more of the RF Power amplifier business in the world. The two units will operate as competitors until the Freescale-NXP deal closes later in 2015. The Freescale RF unit is the stronger of the two and will remain with the new combined companies as part of the merger.

One of the most positive mergers in my mind was Infineon and International Rectifier (IR) earlier this year. I feel very good about this company going forward. Both companies complement each other outstandingly in their distributional strengths, in their competitive products, and in their leading technological and innovative excellence. There is just an air of positivity about this company.

We also now have recent news the Intel will acquire Altera for $17B.

In my industry of electronics media---Arrow Electronics bought the United Technical Publishing division of Hearst Business Media which includes 16 engineering web sites, e-newsletters, inventory access tools and databases.

Whew! I’m sweating and dizzy just trying to get my head around the implications of all of this when the dust finally settles.

IHS comments about just 2014:

Intel maintained its strong position as the largest semiconductor supplier in the world followed by Samsung Electronics and Qualcomm at a strong number two and three position in the rankings.  On the strength of its acquisition of MStar, MediaTek jumped into the top 10 replacing Renesas Electronics at number 10.  The other big mover among the top 20, Avago Technologies, also was boosted by an acquisition, moving up nine places to number 14 with its acquisition of LSI in 2014. 

 

Strategic acquisitions continue to play a major role in shaping both the overall semiconductor market rankings and establishing strong leaders in key semiconductor segments.  NXP and Infineon will be competing for positions among the top 10 semiconductor suppliers in 2015 with the boost from their mergers/acquisitions of Freescale Semiconductor and International Rectifier, respectively. 

 

Among the top 25 semiconductor suppliers, 21 companies achieved growth in 2014.  Out of the four companies suffering declines, three are headquartered in Japan as the Japanese semiconductor market and suppliers continue to struggle.


 

So you can imagine what changes 2015 will bring to the electronics industry when we are not yet  even at the halfway point in the year. But I still think that this is the greatest era in electronics and it is a fantastic time to be an engineer.

 

Please share your thoughts and experiences on this issue and add any other mergers and acquisitions with which you may have a personal experience.

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