You can’t stop progress. The expert panel at “The Future of M&A in the Semiconductor Industry” recently illustrated this. During the SEMI Industry Strategy Symposium conference, a fire alarm provided an unexpected intermission to the enlightening discussion. Thankfully it proved to be a false alarm and the January 11 discussion continued on without any additional delay. The discussion covered a wide range of industry topics while top executives from some of the largest businesses in the semiconductor sector provided a forecast.
Semiconductor Advisors’ Robert Maire moderated while four experts took part in the discussion. Tom St. Dennis, FormFactor’s chairman of the Board, Patrick Ho, a senior research analyst for Stifle Nicolaus, Israel Niv, DCG Systems’ former CEO, and MIS Instruments’ VP of Corporate Development John Ippolito all took part in the discussion.
The Recent Past
To begin, Mr. Maire introduced 2015 and 2016 trends, covering major transactions (with over $100 billion announced in 2015 alone) and how China had emerged as a major player in the development of the industry. He had the four experts discuss whether or not this kind of trend could continue on into 2017. The industry has been building at a rather rapid rate since 2011, and as most industries go, there is an eventual slow down period. All four experts agreed the industry would slow to lower growth levels than the last two years, but it would continue to expand with new technologies coming along.
China recently invested over $150 billion into a fund to help create new development opportunities. The nation now produces around 10 percent of its IC consumption, which will likely grow to 70 percent in the next decade. There are some concerns that the increase in production within China will lead to a pricing collapse for manufacturers in the United States, and Europe. However, most on the panel saw China’s push into the industry as an excellent opportunity akin to the entrances of Japan, Taiwan and Korea.
As the panel moved into questions from the audience, many individuals asked about the future of semiconductor equipment consolidation. Niv pointed to a strong future in metrology and process control sector while Ippolito believed motion control would broker deals. St. Dennis trusts opportunities will emerge throughout the supply chain as acquisitions rank high in strategic value.
Panelists agreed that the amount of deals should remain steady, but the size of deals will continue to increase and sustain the industry’s growth. Regarding China, smaller deals may be in order to support and mutually benefit from the fledgling (but heavily funded) industry.
Source: Solid State Technology