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Semiconductor Companies Break 60 Year Trend and Merge

An obvious motivator for a merger in any industry is to cut costs and increase profits. Semiconductor companies are no different although this area has not done so since it’s creation 60 years ago. As the semiconductor industry grew and matured, profits have plateaued. This extensive growth has additionally led to a fracturing of companies with too many businesses competing with the merged companies who require supplies.With the profits and growth slowing, the industry began a shift in 2013 to begin an extensive merger and acquisition trend. This enabled smaller companies to be purchased and consolidated, making the resulting larger corporation to remain competitive in a shifting market. The merger trend continues through 2016.

The semiconductor industry has required changes in its production and manufacturing supplies as technology is rapidly changing. The industry is moving into technology with a focus on the Internet of Things, consumer technology and other industry tech such as automotive and medical. The semiconductor business must shift as well in order to continue to supply the large quantity of required chips. With large companies requiring chips and other technology, semiconductor companies merging means that suppliers and manufacturers can streamline providing their goods. Merging means less “middle man” and more direct supply for goods.

Will the merger and acquisition trend continue? Experts explain that this is likely as the industry requires continued growth and fuel to maintain what the public is seeking. Consumers are driving the semiconductor and technology industry to research and develop new products. There has been an exponential computer processing growth and all involved industries must work hard to keep up with the technological breakthroughs that continue daily.

The semiconductor companies that have found success with the mergers that have occurred have done so with cost savings, a worldwide market to work with, and protecting their technology with consolidation, Only time will tell if the industry revenue can support research, development and production of new technology.