The GSA (Global Semiconductor Alliance) Market Watch for August 2014 described the semiconductor industry's recent business activity, including funding, IPOs, and mergers & acquisitions.
In July 2014, two semiconductor funding deals raised $106.2 million, up 47.5% from $72.0 million in June 2014. The YTD funding total is also up 70.6%. In the last twelve months, 38 semiconductor funding deals raised $550.1 million, a dollar amount decrease of 2.4% from the $563.8 million raised in the previous twelve months. The total number of fabless/IDM and semiconductor supplier deals closed during the same period decreased by eleven and increased by four, respectively. Also, the average value per disclosed deal has increased from $12.8 million to $16.7 million. Therefore, although there are less funding deals being completed in the semiconductor industry, each company is receiving more financing on average.
July did not see a semiconductor company publicly announce a Series A financing. In the last twelve months, semiconductor start-ups have received $13.8 million in first round financings, a decrease of 55.8% from the $31.2 million received in the prior twelve months.
There were no IPO filings from semiconductor companies in July and there are currently no semiconductor companies awaiting an IPO pricing. In the last twelve months, three semiconductor companies began publicly trading stock.
M&A (Mergers & Acquisitions) Activity
The semiconductor industry has seen 55 M&A transactions totaling approximately $23.4 billion in the last twelve months. This is a dollar amount increase of 134.0% from the $10.0 billion total transaction value in the previous twelve months. Of the 55 deals, thirteen of the disclosed transactions were valued at $300 million or higher. In July, nine semiconductor M&A deals of an entire company were announced. Deals that involved power electronic companies included the following.
Qualcomm Incorporated acquired Wilocity Ltd., a developer of chips that use a newer type of Wi-Fi called WiGig that runs on a relatively high radio frequency, for an undisclosed amount. Qualcomm plans to extend the use of Wilocity's technology into mobile, computing, and networking products starting next year. "We and our partners believe in this technology strongly. We think it's important to the industry," said Qualcomm executive Cormac Conroy. Because of its speedy connection, WiGig is seen as a potential replacement for physical cables still necessary to connect devices such as tablets or PCs to large displays or televisions.
Qualcomm Incorporated is also set to acquire the imaging business of Israel-based CSR Plc. for $44.0 million. The CSR operation in Israel is a 15 person team and descendant of the Zoran engineering group with expertise in digital imaging and wireless photo transfer. The acquisition by Qualcomm provides a fit with its focus on smartphones where the camera function is becoming primary while the market for digital still cameras is declining.
Atmel Corporation signed a definitive agreement to acquire Newport Media Inc. (NMI), a provider of high performance low power Wi-Fi and Bluetooth solutions, for $140.0 million in cash. NMI's products combined with Atmel's low power microcontrollers are designed for applications such as industrial, home and building automation, and consumer products requiring smaller form factors and longer battery life. "This acquisition immediately adds 802.11n Wi-Fi and Bluetooth to our offerings and will accelerate our introduction of low-energy Bluetooth products. Combined with our existing Wi-Fi and Zigbee solutions and industry leading microcontroller portfolio, Atmel is positioned for substantial growth in the Internet of Things marketplace," said Steve Laub, Atmel's President and CEO. The transaction is expected to close during the third quarter of 2014.
Vishay Intertechnology Inc. entered into a definitive agreement to acquire Capella Microsystems Inc., a fabless IC design company specializing in optoelectronic products, for $205.0 million. "Capella will add crucial technological capabilities to our successful and growing opto business that we do not have in-house. It will considerably strengthen Vishay' position in the fast growing market for optical sensors and significantly reduce our time to market for these products," said Dr. Gerald Paul, Vishay's President and CEO. The transaction is expected to close by the first quarter of 2015.
Monolithic Power Systems Inc. (MPS) acquired Sensima Technology SA, a developer of magnetic sensor technologies for angle measurements as well as three-dimensional magnetic field sensing, for $20.6 million in cash. Sensima's patented magnetic angle sensors are used in rotary encoders, electronically commutated motors and a broad range of products. According to the company, combining Sensima's real time precision magnetic angle sensing with MPS's technologies could provide more solutions for key industries such as automotive, industrial, and cloud computing. "Sensima's unique technology will further our diversification strategy and create new opportunities with key customers," said Michael Hsing, CEO and founder of MPS.
Microsemi Corporation acquired Mingoa Ltd., a developer of IP that enables customers to add Ethernet OAM (operations, administration, and maintenance) and/or test functionality to their Ethernet equipment, for an undisclosed amount. Microsemi supplies mixed-signal RF and timing products across multiple communications infrastructures including Carrier Ethernet, mobile/small-cell backhaul applications, and data center interconnect. With an already strong position serving the communications sector, Microsemi recently started to look at the other interfaces required in those applications. "We are starting to fill those gaps, Mingoa fills one of those gaps. Our FPGA product portfolio allows us to take those IPs and rapidly move product into those areas," said Russ Garcia, Microsemi's EVP or worldwide marketing.
Exits
July saw eight companies exit the private sector of the semiconductor industry as Tilera Corporation, Wilocity Ltd., Newport Media Inc., Movea SA, Sensor Platforms Inc., RivieraWaves, Sensima Technology SA, and Mingoa Ltd. were each acquired. The last twelve months have seen 43 companies exit. This is much lower than the last two 12-month totals of 103 and 47 exits.
Disclaimer: The preceding includes semiconductor investment activity in the private and public sector. Totals strive to reflect all publicly announced funding, initial public offering (IPO), and merger and acquisition (M&A) activity for fabless companies, IDMs, and semiconductor suppliers; however, there may be discrepancies as not all companies and private investors publicly disclose such information and some geographical regions prove more difficult to track than others. The full report is available at http://www.gsaglobal.org/2014/08/gsa-market-watch-august-2014/ .