​China's semiconductor M&A accounts for small share of global deals, senior scholar says

Author: MLex Staff
10 Nov 16 | 03:46 GMT

IN BRIEF
Despite concerns expressed in some countries about Chinese mergers and acquisitions in the semiconductor sector, they account for only a small proportion of global deals in the sector, said Ye Tianchun, director of the Institute of Microelectronics at the Chinese Academy of Sciences.  
 

Despite concerns expressed in some countries about Chinese mergers and acquisitions in the semiconductor sector, they account for only a small proportion of global deals in the sector, said Ye Tianchun, director of the Institute of Microelectronics at the Chinese Academy of Sciences.  

Chinese semiconductor acquisitions in the recent years have drawn close attention from foreign companies and raised some concerns from industry players, but actually the deals pursued by Chinese buyers represent only a small part of global semiconductor M&A deals, Ye said at a semiconductor conference* in Shanghai.

As the world’s semiconductor industry enters a mature development phase, the number of M&A deals worldwide has increased.
 
In 2015, the value of global M&A deals in the semiconductor sector reached around $140 billion, while announced deals involving Chinese buyers amounted to only $17.14 billion, or about 12 percent of the total, Ye said, citing statistics from a Chinese research firm. 

China needs to grow and evolve from a low-cost manufacturer into a technology-solution provider, and become a strategic business partner with other industry players, Ye said. 

But China’s foreign buying spree in the semiconductor industry is facing headwinds in the global market. 

US Commerce Secretary Penny Pritzker recently warned that China’s large, government-led investment into the semiconductor industry may distort the world’s integrated-circuit market. 

In October, the German Ministry of Economics reversed its decision to clear a Chinese takeover of chip-equipment maker Aixtron. 

Earlier this year, the Committee on Foreign Investment in the United States, or Cfius, blocked a planned acquisition of Philips’s Lumiled LED lights unit by a consortium headed by Go Scale Capital of China. Separately, Unisplendour withdrew its proposed $3.8-billion investment in data-storage maker Western Digital based on concerns over approval from Cfius. 

*14th China International Semiconductor EXPO & Summit, CSIA, CEAC, Shanghai, Nov. 8, 2016.

-Analysis by Yang Yue