Preface
According to incomplete statistics, there will be 106 semiconductor companies listed/planned to be listed in 2022, 43 of which have been listed on A-shares throughout the year, and the proportion of companies listed on the Science and Technology Innovation Board has reached 88.37%.
The situation seems to have changed in 2023. As consumers control spending, companies have also begun to guard against economic recession and cut costs.
When domestic capital rushes into semiconductors and promotes the listing of semiconductor manufacturers, the review of the Science and Technology Innovation Board is becoming increasingly strict. The exchange begins to judge the attributes of science and technology innovation from the acceptance stage. Therefore, in recent years, the number of companies accepted and reviewed by the Science and Technology Innovation Board has shown a significant downward trend.
In the first quarter of 2023, the number of companies withdrawn from the Science and Technology Innovation Board was as high as 15, of which 8 were integrated circuit-related companies. The IPO pass rate of the semiconductor industry has also undergone certain changes. From the perspective of subdivisions, the review pass rates of different fields vary greatly. Manufacturing/sealing and testing companies still maintain a 100% pass rate, but IDM (mainly power devices) The actual pass rate of enterprises) and EDA tools is low, and a large proportion of equipment companies have withdrawn.
In the cold wind of the market environment, starting from 2023, eight semiconductor-related companies have been listed, namely: Yutai Micro, Longxun Co., Ltd., Jinhaitong, Huahai Chengke, Nanxin Technology, Nanjing Jingsheng, Qizhong Technology , CLP Port.
Review 2023
As early as the beginning of 2023, many people said that the semiconductor industry only looked at equipment and materials, not chip design at all. Those who rushed to enter the market at that time are lucky to be able to leave the market unscathed. Many investments made during the market boom have now seen their valuations shrink significantly, making it difficult to exit the market.
Of course, I am really not optimistic about this industry. Cutting the meat and leaving the market is the best relief. Whether it is equipment, materials or design, semiconductors are not an industry that can be matured in three to five years by relying on funds. If you want to make quick money, it is best to stay away from semiconductors.
The cold attitude of capital and sluggish market demand have caused many chip design startups to suffer. Before they can truly achieve breakeven through product sales, chip product startups have to rely on financing for "blood transfusion", and due to extremely high labor costs , once the funds cannot be renewed, it is not unexpected to lay off employees or even close the company.
Layoffs are a frequent word in the industry this year. Not only are struggling start-ups having to lay off employees to survive, but many powerful industry giants also take the opportunity to optimize their personnel. Companies such as Qualcomm and AMD. According to the data, this is partly to cope with the increasingly pessimistic market outlook, and more importantly, to pay for the previous over-expansion.
Looking at Qualcomm's annual report, we can see that as of the end of 2019, Qualcomm's total employees were about 35,000, and by the end of 2022, Qualcomm's total employees had exceeded 51,000. AMD's total number of employees has also doubled in the past three or four years, and the total number of employees From less than 10,000 people to more than 20,000 people, of course, excluding the increase in personnel brought about by the acquisition of Xilinx, AMD's total number of employees has not doubled, but the increase has also been in the thousands. It is a normal choice to make personnel adjustments when this level of expansion encounters a bearish market trend.
Therefore, talent supply and demand have reversed this year. Judging from the data feedback received from the company, although the salary of school recruitment has not dropped significantly, companies have greater room for choice and it is easier to recruit outstanding fresh graduates at reasonable salaries, unlike the school recruitment in 2020 and 2021. Crazy grabbing of people when recruiting.
Generally speaking, whether it is school recruitment or social recruitment in 2023, recruiters will have greater initiative and stronger bargaining power. For strong companies, now is the best time to recruit.
fierce price war
The fierce price war is another feature of this year's market. Especially in the analog chip market, as part of the market has been seized by local companies, international companies represented by Texas Instruments have launched a large-scale price war in the Chinese market. This has made local analog chip companies that have performed extremely well in the market in the past two years extremely uncomfortable. In particular, local analog companies that are deeply involved in the industrial and automotive fields have not performed well in recent quarters.
In fact, judging from data from market agencies, semiconductor inventory clearance has passed an inflection point, and the consumer electronics market represented by mobile phones is picking up.
According to the compiled data of this third quarter report, listed companies related to the mobile phone industry chain, including Zhuosheng Micro, Xidi Micro, Nanxin, Awin, etc., collectively reported good news. This is a sign of industry recovery and cannot simply be downgraded by consumption. to explain the continued pessimistic expectations.
List of M&A cases
Japanese consortium acquires Toshiba
Recently, according to Reuters news, Japanese private equity firm Japan Industrial Partners successfully completed a 2 trillion yen (US$13.4 billion) tender offer for Toshiba.
Toshiba will hold a special shareholder meeting on November 22 to approve its stock merger, and the company will delist from the Tokyo Stock Exchange on December 20.
Toshiba's position in Japanese business history cannot be underestimated. Even if you look around the world, Toshiba is one of the most well-known comprehensive multinational companies. In its heyday, its business scope covered many fields such as manufacturing, electronics, electrical, finance, machinery, etc., and its market share was are among the best in the world.
Regarding Toshiba's defeat, many analysts pointed out that it was the epitome of Japanese manufacturing. In fact, the overall situation of the Japanese home appliance industry has been poor in recent years, but Toshiba has been reluctant to give up on traditional home appliance businesses such as televisions, washing machines, and personal computers, and ultimately lost a great opportunity to transform its business structure.
Emerson acquires NI
On October 11, Emerson announced that it had completed the acquisition of NI, and NI will become Emerson's new internal test and measurement department.
It is reported that NI was founded in 1976 and is a listed company in the measurement industry. It has more than 50 branches and offices and many system alliance members around the world. For more than 30 years, NI has helped engineers and scientists in the fields of test, control, and design solve various challenges encountered in the process from design, prototype to release.
Emerson said the acquisition of NI enhances Emerson's position as a global automation leader and expands its opportunities to capitalize on key long-term trends such as nearshoring, digital transformation, sustainability and decarbonization. NI brings a portfolio of software, control and smart device products that are expected to accelerate Emerson's revenue growth, bringing its growth target to 4-7%.
Cadence acquires Intrinsix
Last month, Cadence announced a definitive agreement to acquire Intrinsix Corporation.
Intrinsix, a wholly-owned subsidiary of CEVA, a leader in wireless connectivity and smart sensing technology, is a design engineering solutions provider focused on the U.S. aerospace and defense industry with expertise in RF, mixed-signal, digital, software, security processors and The Heterogeneous SoC Interface IP area provides complex SoC design expertise with over 1,500 successful designs, and its customer base includes companies such as Intel, IBM, Analog Devices, and Lockheed Martin.
The acquisition will bring Cadence a highly skilled engineering team with expertise in advanced nodes, RF, mixed-signal and security algorithms to support customers in key high-growth verticals such as the aerospace and defense industries. Address increasing silicon and system-level complexity and accelerate time to market.
Cadence expands EDA/IP business in two cities
On July 15, Cadence announced the completion of the acquisition of EDA company Pulsic, further expanding its multi-physics system analysis and computational fluid dynamics product lineup.
On July 20, Cadence once again reached a final agreement to acquire Rambus SerDes and memory interface PHY IP business.
Memory and SerDes IP design and integration remain integral to the design of artificial intelligence, data center and hyperscale applications, CPU architectures and network equipment, and the addition of Rambus IP and an experienced team further accelerates Cadence’s intelligent system design strategy , thereby promoting design excellence.
The acquisition of Rambus PHY IP broadens Cadence's well-established enterprise IP portfolio and expands its presence across geographies and vertical markets, such as the aerospace and defense markets, providing complete subsystem solutions to further meet the needs of Cadence's global customers.
AMD acquires AI startup Mipsology
Not long ago, AMD acquired the French startup Mipsology to enhance its artificial intelligence reasoning software capabilities and challenge the artificial intelligence chip giant Nvidia.
Mipsology was founded in Paraiso, France in 2015 by FPGA experts from the emulator company EVE. It developed FPGA compilation technology to achieve an FPGA structure utilization rate of more than 100%, and entered the field of artificial intelligence in 2020. Its Zebra AI software supports industry frameworks including TensorFlow and PyTorch, and ONNX Runtime, which will help accelerate FPGAs to run AI workloads. The integration also supports the AMD Unified Artificial Intelligence (UAI) software stack, which provides a tightly coupled AI training and inference interface across the edge, endpoint and cloud.
Simply put, Mipsology develops "plug-and-play" software that accelerates artificial intelligence inference performance without the need for new tools or changes to neural network models. Inference is an important aspect of artificial intelligence that allows applications to make predictions and generate responses based on models trained to recognize patterns or objects.
The acquisition is part of AMD's larger strategy to challenge Nvidia's dominance in AI computing, with AMD Chairman and CEO Lisa Su calling it "the leading GPU, CPU and adaptive processor for AI inference and training." Computational Solutions”.
AMD said Mipsology's highly skilled software team has proven expertise in delivering AI software and solutions running on AMD's Adaptive Compute chips and will join the AMD AI Group to help further accelerate our customer engagement and Expand our AI software development capabilities. Specifically, the team will help develop our complete AI software stack, expand our open ecosystem of software tools, libraries and models, and pave the way for streamlined deployment of AI models running on AMD hardware.
AMD acquires Nod.ai
Recently, AMD plans to acquire an artificial intelligence startup called Nod.ai as part of its efforts to enhance its software capabilities. The acquisition follows AMD's recent acquisition of Mipsology.
After more than ten years of hard work, Nvidia has established a strong advantage in the AI chip market through the software it produces and its software developer ecosystem.
To catch up with rivals, AMD plans to invest heavily in key software needed for the company's advanced artificial intelligence chips.
AMD has a deep pipeline of chips for AI workloads, but Nvidia's CUDA software platform has become the de facto industry standard for GPU programming, giving the company an insurmountable advantage over rivals. However, Nvidia's CUDA is proprietary and closed source, which contrasts with AMD's strategy of using open source solutions such as the ROCm programming stack.
To create a more cohesive software portfolio, AMD has realigned ROCm development.
Nod.ai's open source software fits perfectly with AMD's software strategy. The addition of the Nod.ai team accelerates AMD’s ability to advance open source compiler technology and enable portable, high-performance AI solutions across the AMD portfolio. Today, Nod.ai's technology has been widely deployed in the cloud, edge and various endpoint devices.
ROHM acquires former Solar Frontier Guofu factory
In July, Rohm announced that it would acquire the former Solar Frontier Guofu factory to expand the production capacity of SiC power semiconductors.
With the popularity of new energy vehicles, SiC has gradually revealed its potential to become a rising star in power devices. According to forecasts from market analyst Yole, SiC power devices will account for as much as 30% of the entire power device market in the next five years. By 2027, the entire industry will be worth US$6 billion.
To this end, Rohm has made a long-term plan to ensure that it can become a strong competitor in this market.
Rohm has set a sales target of more than 270 billion yen for the SiC power semiconductor business in fiscal 2027, and plans to invest 510 billion yen from fiscal 2021 to 2027. In December 2022, mass production will begin in the new manufacturing building of ROHM Apollo Chikugo Factory, and the scale will gradually expand and is expected to increase 6.5 times compared with the current fiscal year. The company said that by further increasing the production capacity of the new production building of the original Guofu factory acquired this time, by fiscal year 2030, the production capacity can increase 35 times compared with fiscal year 2021.
In addition, Rohm also plans to shift to SiC power semiconductor production on an 8-inch wafer line by 2025, and has introduced manufacturing equipment that can convert 6-inch wafers into 8-inch wafers in a new manufacturing building at the Chikugo plant. The company said it is considering introducing 8-inch wafer manufacturing equipment at the former Guofu factory.
What signals are released behind mergers and acquisitions?
It is not difficult to understand that "merger and integration" is a major trend in the development of the semiconductor industry. Enterprises quickly occupy "new heights" through acquisitions, obtain new technologies and resources, improve production scale and competitiveness, strengthen business moats or quickly occupy emerging industries. market and achieve rapid development.
Judging from the recent merger and acquisition cases mentioned above, most of them are concentrated in the fields of EDA/IP, AI, and third-generation semiconductors.
Frequent mergers and acquisitions of EDA/IP
EDA/IP belongs to the semiconductor upstream supporting industry, and its importance for chip design, manufacturing, packaging and testing is self-evident. In order to meet the growing and complex market demands, major giants have been adopting merger and acquisition strategies to promote industry development and their own growth.
This is also the reason for Cadence's frequent mergers and acquisitions.
In fact, in the long run, the development of semiconductors is inseparable from mergers and acquisitions. In particular, the development history of the EDA industry is a magnificent epic full of mergers and acquisitions.
Chip giants seize the AI track
AI is one of the hottest topics this year. In this regard, industry manufacturers are also trying to enhance their competitiveness through mergers and acquisitions. For example, Infineon acquired Imagimob, a leader in micro machine learning, to enhance its TinyML edge AI capabilities on microcontrollers and sensors.
ADI and Renesas Electronics have also laid out edge-side AI/ML.
Take ADI's recent acquisitions of Mipsology and Nod.ai as examples, showing ADI's attempt to catch up with Nvidia.
Since last year, Lisa Su and other executives have developed a comprehensive artificial intelligence strategy that focuses on "AMD's multi-billion dollar growth opportunities in the cloud, edge and an increasingly diverse number of intelligent endpoints."
The prospect of automotive chips is attractive, and the third generation of semiconductors is accelerating
In addition, with the rapid development of electric vehicles, automotive semiconductor loads have been on an upward trend in the past decade. Omdia predicts that the automotive semiconductor market will grow to more than US$80 billion in 2025. Against this background, automotive chip giants are actively preparing for war and continuously improving their capabilities through frequent mergers and acquisitions to cope with the rapidly developing automotive technology needs.
Since 2023, Infineon has acquired two companies, GaN Systems and Imagimob, to enhance Infineon’s industry position in the gallium nitride, electric vehicle on-board charger and edge AI markets;
Renesas Electronics leverages Panthronics' NFC expertise and products to strengthen its offering of a wide range of connectivity solutions to customers in areas such as IoT and automotive;
Against the background of weak growth in the mobile phone market in recent years, Qualcomm is actively strengthening its strength in the automotive chip field and improving its business through the acquisition of Autotalks. Autotalks is committed to automotive V2X communication technology. After the acquisition is completed, Autotalks' V2X technology will be included in the Snapdragon digital chassis product portfolio.
Summarize
Today, the global semiconductor industry is experiencing cyclical fluctuations, the progress of local supply chain support in various countries, and the direction of the semiconductor technology game may become important factors affecting industrial mergers and acquisitions.
Under this situation, mergers and acquisitions in the domestic semiconductor industry are becoming increasingly active, showing good signs.
As domestic semiconductor manufacturers join the wave of acquisitions, it is not only an important measure to promote industrial upgrading and technological progress, but also a key path to achieving independence and controllability. Domestic semiconductor mergers and acquisitions have also pushed "domestic opportunities" to China's local chip companies, creating a window of opportunity for further domestic substitution and outperforming time and the market through capital weapons.
Generally speaking, the semiconductor market in 2023 is gradually returning to normal, that is, the normal performance at the bottom of the industry cycle. Hot money is leaving, market voices are gradually becoming calmer, and most practitioners tend to be pessimistic about the next year. Some markets As recovery begins, some markets will become even more cruel in the coming year. This conservative trend-following capacity forecast is a prerequisite for achieving a reversal of supply and demand next year.