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Merger & Acquisition Activity Among Electronic Components Companies Surges to Twelve Year High

19 October 2015 Greg Wood

2015 is shaping up to be a very high year in the electronic component industry for company acquisitions, product line sales & mergers with a total of 36. There hasn't been this level of dynamic company changes in the semiconductor industry since the early 2000's.

This trend appears to be continuing as Fairchild Semiconductor appears to be positioning itself for a buyer, perhaps ON Semiconductor or Infineon Technologies.

http://www.reuters.com/article/2015/10/14/us-fairchild-semico-m-a-idUSKCN0S82AD20151014

What is driving all this acquisition activity?

With slower growth projected for the semiconductor industry, company executives are looking more toward acquisitive growth versus organic growth in 2016. This coupled with the semiconductor industry's solid performance over the past three years and low cost of borrowing, have created cash rich companies with new opportunities.

Many semiconductor companies are also looking to improve their product portfolio by offering a more complete solution to customers with more integrated systems. Some companies look to acquisitions to create more steady revenue year around with less seasonal spikes. And finally, semiconductor companies are also looking to improve margin and/or market share by buying competitors or sell off less profitable business lines.

The list for 2015 is impressive and continues to grow:

Comprehensive and in-depth research on the semiconductor industry from IHS Technology can be found at technology.ihs.com.

Greg Wood is a Director in the Electronic Parts business at IHS
Special thanks to Praveen Hiraskar and Ankita Duggal for their support)
Posted on 19 October 2015

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