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Semiconductor companies have gone public in large numbers over the past few years. As of 2022H1, more than 60% of semiconductor-related listed companies have completed listing in the past five years.
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In recent years, the median revenue scale of semiconductor companies declared by Kechuang Board has gradually decreased, reflecting the characteristics of "first large and then small" revenue scale, and a large number of semiconductor companies have been listed.
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The number of new semiconductor companies reached its peak in 2017, and the number of new companies has declined significantly in recent years. The future is mainly the knockout competition.
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A-share listed semiconductor companies gradually increase, and the overall market value begins to fall in 2022. In the future, semiconductor listed companies may maintain their market value through mergers and acquisitions.
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Before 2000, the global IC design industry maintained a growth rate of more than 20%, IC design companies continued to emerge,growth investment and IPO tide appeared, but the market value of listed companies was generally small. At that time, global semiconductor small and medium-sized transactions prevailed, although the number of mergers and acquisitions continued to rise from less than 10 per year to 300-500 per year, the amount of a single transaction was mostly below $10 million.
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After 2000, the Internet bubble pushed a group of IC design companies with a market value of nearly US $100 billion to grow up, and there began to be a large number of mergers and acquisitions above US $1 billion, gradually entering the large-scale mergers and acquisitions above US $5 billion, and occasionally spin-offs. After 2010, with the emergence of scale effects and disruptive technologies,tens of billions of dollars of mergers and acquisitions have occurred frequently in recent years.
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Before 2013, the technology of domestic semiconductor enterprises was mainly state-owned, and there were only 22 A-share semiconductor listed enterprises.
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From 2013 to 2017, M & A fund-based forces searched overseas for scarce technologies and bought back domestic ones to promote China's semiconductor development.
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Since 2018, Sino-US trade friction has promoted domestic chip substitution, with strong market demand. Many domestic semiconductor enterprises have grown rapidly, with growth investment and IPO tide. Atpresent, thereare more than 100 A-share semiconductor enterprises, and small-scale semiconductor mergers and acquisitions have quietly occurred.
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Semiconductor materials and equipment: There are many types, downstream concentration, suitable for multi-product platform development, and it is expected to have an integrated development trend.
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Chip design: analog IC, MCU relatively do not pursue high-end process, more dependent on manual design and experience accumulation, product life cycle is long, and downstream application fields are numerous, the future is more suitable for platform development.
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With
the continuous progress of semiconductor technology, semiconductor
enterprises have the demand for business slimming and professional
development.
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The early IDM has been spinning off the semiconductor business unit for decades
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Industry
chain division is refined, IC design entry threshold is lowered, IC
design is closest to application market, technology innovation
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The upsurge of M & A in the semiconductor industry is closely related to the new technology of each era.internetRise, 00ssmartphoneFast penetration, 10 years calculation,big dataand in recent years.Internet of Thingsthe vigorous development of
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1980-2000 Rapid development period: after a group of leading enterprises appear, the scale of M & A will increase greatly
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At the height of the Internet bubble in 2000: semiconductor companies with a market capitalization of $100 billion began to havea large number of10M & A over USD 100 millionappear
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After 2000: Head companies that survived the Internet bubble shuffle and began to enter50More than 100 million large mergers and acquisitionsand splitting phase
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Technological change has continued in recent years, and the mega-trading impulse is still there, butantitrustTightening
restrictions have curbed the completion of transactions, and giant
transactions such as Broadcom's acquisition of Qualcomm and Nvidia's
acquisition of ARM have all failed due to regulatory review.
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Semiconductor
segments have begun to accumulate mature listed companies, leaving
little time for semiconductor companies that have not yet entered the
mature stage.
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The
accumulation of semiconductor companies and investment enthusiasm have
reached a peak, and the exit path investors seek in the future is not
necessarily an IPO.
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Business
synergy in mergers and acquisitions in the semiconductor industry is
very important, and it is crucial to acquire high-quality targets and
build platform-based businesses.
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The
seller needs to bind the buyer with strong business synergy as soon as
possible at a reasonable valuation price to obtain resources and funds
for sustainable development.
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In
the process of gradually shaping the market pattern, there will be
enterprises layout a variety of product lines, becoming a platform-type
giant. Once the tycoon completes the layout of the same category of
products, it will miss the best time to sell, unable to become the head
semiconductor enterprise or to sell decisively.
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There
are many types of semiconductor materials and equipment, and the
downstream is concentrated, which is suitable for the development of
multi-product platform, and it is expected that there will be an
integration trend.
- Analog IC and MCU are relatively not chasing high-end processes, relying more on manual design and experience accumulation, with long product life cycle and numerous downstream application fields, which are more suitable for platform development in the future.
Part
1
Domestic semiconductor mergers and acquisitions are about to enter the merger and integration period
Becauseof the lack of core tide and domestic substitution trend, domestic semiconductor enterprises are experiencing vigorous development opportunities in the past few years. With the competition and development of new entrants and existing players, the performance of domestic semiconductors in the primary and secondary markets has gradually emerged as a turning point in capital development:
Global semiconductors are already in a period of large-scale integration and separation: the global semiconductor market is dynamically balanced between supply and demand, and the market maintains steady growth; the industry competition pattern becomes clear and firm, and the leader maintains stable profits, but it is difficult to have explosive growth.
Part
2
Global M & A Trends and Reference Significance for Domestic Semiconductors
In 2014 and before, the average annual transaction amount of semiconductor M & A in the world was about USD 12.6 billion,mainly horizontal M & A and business expansion. Relevant fields mainly occurred in analog chips, RF chips, Wi-Fi chips, memory chips, etc. Theindustry was reshuffled by stages, and M & A reflected scale effect.
Represented by 5G, AI and autonomous drivingNew technologies facilitate a digital world,Promote the head integration of each subdivision field, and the chip provides the bottom technical support for it.Sino-American science and technology game,Large American enterprises strengthen integration and build giant supply chains and ecosystems to hedge against the threat of technological substitution by the mainland of China enterprises.the United States government to takeEasy monetary policy,The capital market is at a high point, and the leading enterprises of the subdivided track are rich in cash, and there is a need to make up the business plate to create an ecological closed loop.The semiconductor industry has reached a high cost era, the industry classification has stabilized, and most giants have touched the ceiling of development.The law of capital pushes the merger of peers towards inevitability.The number of semiconductor listed companies on Nasdaq has gradually consolidated from more than 100 in 2011 to more than 40 in 2021.
Part
3
The global M & A wave starts with technological innovation
Falling tide in capital market or tightening of regulatory policies
First, the mechanism and efficiency of large enterprises are difficult to meet the rapid upgrading in many fields, and continuous optimization (stripping and integration) is carried out.
Third, the semiconductor industry itself is greatly affected by technology, capital market and regulatory environment, showing strong cyclical characteristics, and mergers and acquisitions also fluctuate accordingly.
Part
4
Trends in M & A of Chinese Semiconductors
Since 2013, domestic enterprises and M & A funds have startedActively go to sea to acquire high-quality semiconductor targets and domestic scarce technologiesAround RF, power, CMOS imaging, graphics processing, etc., and the transaction amount is relatively large, the annual M & A transaction amount from 2013 to 2018 is more than 2 billion US dollars.
After 2018, with the severe international political environment and Sino-US trade conflicts,The number and amount of transactions dropped precipitously2019-2020 Almost no overseas M & A deals succeed,Only mature technologies have been successfully acquired.
to stop China from going out to sea to acquire acquisitions.The main resistance still comes from European and American governments, especially the United States C.by FIUSAs a representative,A number of semiconductor overseas M & A cases were rejected.
Part
5
Domestic M & A trends
The game of science and technology between China and the United States, the acceleration of technology iteration, the rise of R & D costs, and the diversification of customer demand are all compressing the time and capital to support the organic growth of semiconductor enterprises. The threshold of semiconductor industry is very high. If you don't buy it, you need to start from scratch. The time cost is very high. Now many companies are willing to go overseas mergers and acquisitions, because overseas companies have a deep accumulation.Mergers and acquisitions can buy time and certainty.The policy environment and the characteristics of capital markets are favourable to M & As.The State Council issued Several Policies for Promoting High-quality Development of Integrated Circuit Industry and Software Industry in the New Period to encourage and support integrated circuit enterprises and software enterprises to strengthen resource integration.
Horizontal mergers and acquisitions, expansion of product lines, the more complete the product, often the more likely to be favored by customers,But a company often can't do it all by itself, so it can continue to grow in size. China's largest analog chip company now has thousands of product lines, TI, ADI and other giant companies have tens of thousands of product specifications, convenient customer supply chain management, for winning customers great advantages. Therefore, for domestic analog chip companies, the future must beIncrease product lines through acquisitions.Longitudinal extension upstream and downstream,Semiconductor industry "lack of core" has periodicity (because its supply expansion needs a certain amount of advance and difficult to avoid),It is especially important to achieve stable production capacity.At present, semiconductor companies with a market value of 100 billion have appeared in China. With the withdrawal of semiconductor secondary market valuation in the first half of this year,Head semiconductor companies have incentives to maintain market value through mergers and acquisitions.By 2022H1, there were 37 semiconductor listed companies with monetary capital plus trading financial assets exceeding RMB 2 billion yuan and 15 semiconductor listed companies with monetary capital exceeding RMB 4 billion yuan. Combined with the company's business situation, after considering the working capital and capital expenditure required for the organic growth of its own business,Some companies with plenty of cash left may consider acquisitions.
Domestic semiconductor mergers and acquisitions gradually began to be active, with an increase of 89% in 2021 compared with 2018.Subject matter of mergerOverall valuations also showed an upward trend,The overall valuation of market-based transactions is nearly 15 billion in 2021.Semiconductor is stillSmall M & A scale dominated,The number of transactions with an overall valuation of less than 500 million accounted for 45%.M & A transactions that have occurred are mainly concentrated inDigital chips, analog chips and materials.
The big deals (over a billion) were mainly in materials, analog chips and sensors.The semiconductor industry is stillMainly horizontal mergers and acquisitions,The number of transactions accounted for 50%.80% of cases where transaction amounts were disclosedCash payment is the main method.Domestic acquisitions ormainly to acquire controlling interests,80% of transactions have an acquisition ratio of more than 50%.
The main reasons for the failure of domestic semiconductor mergers and acquisitions in the past few years include: 1)Buyer's inability to pay; 2)The development prospect of the target business is unclear, and the performance is poor.; 3)The high premium leads to rejection by the CSRC or abandonment by the buyer.
The number of new shares has increased from 3 in 2019 to 41 in 2022. In 2022, the breaking rate will reach 25%, and the breaking rate of new shares will be normalized, among which2022ÄêH1There are 7 breakdowns in the semiconductor field, with the largest number of breakdowns in all secondary industries.Semiconductor valuation P/E multiples reached a high of 139 times in 2021, 94 times different from the median P/E of all A shares, but after more than a year of correction,The difference between semiconductor plate and A-share valuation has narrowed significantly, as of 2022H1Only 20 times.Capital markets seeking exits other than IPOs are external triggers for M & A:The tide of mergers and acquisitions in the securities market generally lags behind the IPO tide by 1-3 years. The main reason is that after the IPO, companies face pressure from old shareholders to withdraw and the secondary market to take over. In order to meet the growth requirements of mainstream institutions, they will consider extension on the basis of endogenous growth. M & A.PE/VC will go deep into the M & A market and become an important driver in the future:On the one hand, PE/VC found that IPO exit was not the best choice and began to seek M & A exit. On the other hand, under the pressure of competition, more and more PE/VC began to dominate M & A. Compared with overseas mature PE/VC market M & A fund scale accounts for more than half, China PE/VC with M & A as the characteristic strategy fund proportion will also gradually increase.The semiconductor industry's downward cycle will be an inherent driver of M & A.Under the background of domestic substitution and lack of core, China's semiconductor industry has been growing on the demand side, and the competition on the supply side is not fierce, resulting in long-term dispersion of the pattern. However, there is natural periodicity in the semiconductor industry, and the downward stage of the industry cycle will promote industrial merger and acquisition integration.
Part
6
Prospects for domestic semiconductor mergers and acquisitions
The localization rate of semiconductor materials is generally low,Domestic material utilization rate is only about 15%, domestic enterprises mostly single link product layout,In the future, it is expected to realize product breakthrough under the trend of domestic Fab factory expansion, and realize rapid platform construction in combination with extension merger and acquisition.
Technology frontier and product completeness are important sources of competitiveness of semiconductor equipment enterprises. Mergers and acquisitions are one of the important ways for equipment companies to update their technologies and rapidly expand their product categories.At present, most of the domestic semiconductor equipment listed enterprises are laid out in a single link. In the future, There is sufficient motivation to achieve multi-link product layout through mergers and acquisitions.
At present, there are 22 A-share analog chip enterprises, with an overall market value of nearly RMB 400 billion and revenue of RMB 36 billion in 2021, 8 of which will be listed in 2022. After a long period of accumulation, domestic simulation manufacturers have accumulated a certain number of listed targets and primary market targets, and there have been three transactions valued at more than RMB 1 billion in China.Combined with the characteristics of M & A driven development of analog chips, analog chips are expected to take the lead in industry M & A integration trend in the future.
Domestic MCU enterprises are small in scale, with a small number of products and a large layout in the middle and low-end consumer fields, and are actively developing products in the certification industry and automobile fields. In 2021, there have been 3 acquisitions of MCU targets in China, Jingfeng Mingyuan acquired Nanjing Lingou (high premium reason, failure), Zhongji Guowei acquired Aixi Semiconductor, Xihua Technology acquired Shuimu Blue Whale, and realized product category expansion and modular mixed layout AIoT through merger and acquisition. There are many MCU segments, and the software and hardware development platform has scale effect, which is suitable for the development of M & A platform.
Part
7
Enlightenment from Semiconductor M & A Cases
The mobile phone chip market has gradually begun to withdraw from competition since 2010, Marvell's mobile phone chip products have also begun to decline in competitiveness since the second half of 2014, and the relevant valuation has also dropped from a high of 4 billion US dollars to 1 billion US dollars, but there are still many bidding buyers at this time. However, Marvell's internal selling decision was not decisive enough, resulting in missing the best selling opportunity, and finally sold to Aojie Technology for only about $100 million three years later.In the process of gradually shaping the market pattern, it is still necessary to sell decisively if it cannot become a head semiconductor enterprise, find a buyer who can have business collaboration as soon as possible, and the relevant business can continue to develop or even grow.
Weill sharesAround the mobile phone industry chainChip design business transformation through acquisition of businessExpand the automotive customer base, combined with its own distribution business channels smoothlyCompletion of post-investment integration and managementSuccessfully built itself into a platform chip company.
Part
8
Summary of domestic semiconductor mergers and acquisitions
First, the capital stage of the domestic semiconductor industrywill transition from targeting listing to merger integration.
Second,the development of the domestic semiconductor industry has gradually entered the knockout stage.As a buyer, it is necessary to make acquisition planning for platform-type development, and as a seller, it is necessary to grasp the timing of sale.
Third,give priority to M & A-driven segments andfollow the M & A wave
