China's Semiconductor M&A Wave Rises

Author: Yang Pengyue

Source: China Electronics News, China Electronics Information Industry Network

Website Link: https://www.cena.com.cn/semi/20250331/126157.html

    As spring brings warmth and flowers, a major trend of consolidation in the semiconductor industry is also approaching.

    In March this year, the semiconductor M&A fever in China continued to heat up, with multiple companies from different segments of the industry disclosing their acquisition and merger plans, accelerating the industry's entry into a new stage. For China's semiconductor industry, M&A is timely and an effective way for enterprises to strengthen themselves, but opportunities and challenges coexist in this process.

Concentrated Outbreak, Semiconductor M&A "Spring Tide Surges"

    On March 4th, display driver chip design company Xinxiangwei announced that it was planning to acquire the controlling stake of Aixi Sheng and raise funds simultaneously. On March 5th, China's semiconductor silicon material enterprise Youyan Silicon announced its intention to acquire 70% of the shares of Japanese company DGT for 57.9 million yuan. On March 10th, semiconductor equipment enterprises North Star and Xinyuan Micro both issued announcements, with North Star planning to acquire the controlling stake of Xinyuan Micro. On March 13th, semiconductor packaging material enterprise Huahai Chengke announced its intention to invest another 1.12 billion yuan to acquire 70% of the shares of Hengsuo Huawei, with the two acquisitions totaling approximately 1.6 billion yuan to acquire 100% of the shares of Hengsuo Huawei. On March 17th, domestic EDA enterprise Huada Jiutian stated in its announcement that it was planning to acquire the controlling stake of Xinheda Semiconductor.

    Xinxiangwei and Aixi Sheng are both display chip design companies, but each has its own focus. The Aixi Sheng that Xinxiangwei plans to acquire has technical advantages in display touch integrated driver chips (TDDI), bridge chips, and intelligent interconnection modules, with its products covering a wide range of scenarios such as smartphones, smart wearables, and smart home appliances, complementing Xinxiangwei's existing main battlefields in mobile terminals and industrial control displays. Through this acquisition, Xinxiangwei can quickly enter the high-end TDDI chip market and the intelligent module field, building a complete capability from chips to system solutions. Meanwhile, both North Star and Xinyuan Micro belong to the semiconductor equipment sector. North Star's main products include core process equipment such as etching, film deposition, furnace tubes, cleaning, rapid annealing, and crystal growth, while Xinyuan Micro's main products include core process equipment such as coating and developing equipment. The complementary nature of the two is conducive to the exertion of synergy effects.

    Some mergers and acquisitions are driven by the need to improve the layout of the industrial chain. For instance, Youyan Silicon has advantages in silicon material research and development technology but lacks some key technologies in terminal product processing. DGT's processing technology can fill this gap, promoting the integration and innovation of both parties' technologies. Additionally, DGT is a stable partner of international semiconductor giants such as TEL, TSMC, and Micron. Youyan Silicon can leverage its customer channels to further expand its overseas market. Industry analysts point out that if the integration is successfully completed, it is expected to build a more complete industrial chain in the semiconductor silicon component field, achieving full coverage from silicon material research and production to silicon component manufacturing, and enhancing its position in the global semiconductor industry supply chain.

Dual-Drive, Time for Semiconductor Consolidation Has Come

    Behind the domestic semiconductor M&A fever lies the dual drive of policy support and market demand.

On the policy front, since 2024, economic authorities such as the China Securities Regulatory Commission and local governments have successively introduced policies and measures to support the M&A and reorganization of listed companies, accelerating industry consolidation. Among them, in June last year, the "Eight Measures for Deepening the Reform of the STAR Market to Serve Technological Innovation and New Quality Productivity Development" was released, and in September last year, the "Opinions on Deepening the Reform of the M&A and Reorganization Market for Listed Companies" was issued. Local action plans in Shanghai, Shenzhen, Nanjing, and other places further support enterprise M&A and reorganization. Among them, Nanjing released the "Several Measures to Support the High-Quality Development of Enterprise Mergers and Acquisitions and Restructuring" in March this year, encouraging enterprises to actively carry out mergers and acquisitions and restructuring in key industries such as integrated circuits to rapidly expand the industrial scale and achieve breakthroughs in key technologies.

    In the market, the semiconductor industry has rebounded strongly since last year. Global sales are expected to exceed the $600 billion mark for the first time in 2024 and maintain double-digit growth in 2025. SEMI predicts that the semiconductor market related to AI will maintain a compound annual growth rate of about 30% in the next 3 to 5 years, becoming an important driving force for the industry to reach the trillion-dollar mark. In the Chinese market, it has been the world's largest market for semiconductor equipment for five consecutive years. With domestic semiconductor equipment, component and material manufacturers accelerating their business expansion, there will be more opportunities to showcase their capabilities.

    From the global development history of the semiconductor industry, mergers and acquisitions have been an effective experience for many well-known international semiconductor companies to grow stronger. For instance, over several decades, American Applied Materials has successively acquired the ion implantation department of British Lintott Engineering, Israeli semiconductor wafer laser cleaning technology provider Oramir, and Finnish atomic layer deposition (ALD) technology company Picosun, and has thus earned the title of "semiconductor equipment supermarket". In the development history of communication IC giant Broadcom, in 2015, Avago acquired Broadcom for $37 billion and renamed itself Broadcom. This merger made the new Broadcom the fifth-largest semiconductor company in the world. In 2017, Broadcom attempted to acquire Qualcomm for $130 billion but failed. Subsequently, Broadcom spent a huge amount of money to acquire Symantec and cloud computing software company VMware, continuously expanding its business territory.