Flurry of Mergers and Acquisitions Reshape the Automotive Semiconductor Supplier Landscape

Nov. 18, 2014
Capped by the announcement that Qualcomm Inc. would buy CSR PLC, the automotive semiconductor industry recently has been undergoing a wave of merger and acquisition (M&A) activity that has shaken up the competitive order of the market.

Capped by the announcement that Qualcomm Inc. would buy CSR PLC, the automotive semiconductor industry recently has been undergoing a wave of merger and acquisition (M&A) activity that has shaken up the competitive order of the market, according to IHS Technology.

In two major deals announced in August, Germany's Infineon Technologies AG said it would acquire U.S.-based International Rectifier Corp., while On Semiconductor Corp. sealed a deal to acquire fellow American firm Aptina Imaging Corp.

With the International Rectifier deal, Infineon bolstered its No. 2 rank in the global automotive semiconductor business and helped it to close the gap on the market leader, Renesas of Japan. Following the acquisition, Infineon trails Renesas by just $288 million, down from nearly $500 before Infineon bought International Rectifier, based on ranking data from 2013.

Meanwhile, the Aptina acquisition expanded On's automotive semiconductor revenue by $183 million, allowing On to move up one position to eighth place in the market, also based on 2013 ranking data.

The purchase of the U.K.'s CSR will allow California-based Qualcomm to enhance its market share. Qualcomm ranked No. 43 in 2013, while CSR came in at 23. The two companies combined would have ranked at No. 19 in 2013.

"While these three M&A deals differ in their specific goals and benefits, all have the same strategic objective: expanding market share in the lucrative business for semiconductors used in automobiles," said Ahad Buksh, analyst for automotive semiconductors at IHS. "The automotive supply is adding new infotainment, communications and driver-assist functionality at a rapid pace, causing related semiconductor revenue to rise 5 percent to reach $26 billion in 2013. Suppliers are buying up competitors to gain scale in the market, to add key capabilities and to capitalize on established customer relationships."

This data was derived from the report entitled "Competitive Landscaping Tool CLT - Automotive - Q3 2014" from the Automotive Semiconductor service at IHS Technology.

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