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28th July 2020

The recent rise in Semi-Conductor Acquisitions

The recent acquisitions of semiconductor companies continue to be a hot topic with several mergers taking place over the past few years. The news that Analog Devices will acquire Maxim Integrated for $20.9 Billion was announced as recently as Mid July.

Hackaday has been sharing updates of this kind for a while with over 9 announcements on mergers and acquisitions since 2015.

The changes will continue to have an impact on anyone who deals in the industry as part of their work. These changes are creating mammoth semiconductor companies, with fewer independent manufacturers now as a result. These huge companies are all working their production lines even harder to cope with the high demand for electronic components. This demand is fuelled ever further by the unquenchable consumer and commercial drive for new technology that shows no signs of slowing.

The Business Research company reveal that the global general electronic components market is expected to grow from its $373.73 billion worth in 2019 to $519.65 billion by 2023 through a compound annual growth rate (CAGR) of 8.59%.

As more acquisitions take place the steeper the competition becomes; as semiconductor giants consolidate their resources. This leads to the remaining suppliers facing further pressure to team up in order to remain competitive. This trend shows no sign of slowing as this effect continues to snowball.

How will this effect buyers?

Firstly, they will clearly have less choice of who to buy from, lines could be dropped and lead times extended. Distribution chains and technical support will be disrupted as the new owners change how they market their new acquisitions.

They may also find themselves at the back of the queue as customers, finding their own importance diminished.

Hidden positives could include greater efficiency, more advanced solutions or a reduction in pricing with new options for fabrication or marketing channels. However, mergers and acquisitions are known for bringing uncertainty and volatility to workplaces which can bring with it its own disruptions.

Do you need help?

Has your production been affected by this ever-changing environment? Have your lead times extended, pricing increased, parts become obsolete?

Ignys can help extend the longevity of products by looking for alternative components where necessary as well looking to futureproof new products with an electronics design review or cost reduction exercise.

Speak to us if you need advice