"Semiconductor M&A Reaches 26 Trillion Won Over 8 Months This Year... Heat Cools After Q1"

[Asia Economy Reporter Jeong Hyunjin] An analysis has emerged that the enthusiasm for mergers and acquisitions (M&A) in the semiconductor industry has cooled since the first quarter of this year. As the global semiconductor hegemony war intensifies, major countries such as the United States, China, and Europe appear to have influenced this trend by recognizing the semiconductor industry as a matter of national security.

According to market research firm IC Insights on the 4th, a total of 14 M&A deals worth $22 billion (approximately 26.1 trillion KRW) were completed in the semiconductor industry from January to August this year. This figure falls short of the M&A deal sizes of $24.7 billion and $23.4 billion recorded in the same period in 2019 and last year, respectively. The average size of M&A deals conducted this year was about $1.6 billion.

(Source: IC Insights)

IC Insights reported that M&A activity in the semiconductor market was active from the second half of last year through early this year, with the first quarter of this year setting a record high for M&A deal size, but has gradually declined since then. IC Insights explained, "The so-called 'mega deals' that were confirmed in the semiconductor M&A market last year have disappeared."

The disappearance of mega deals since the second quarter of this year is interpreted as a result of major countries such as the United States and China protecting their domestic semiconductor companies while actively supporting the semiconductor industry as part of national security. In this atmosphere, obtaining approval from relevant countries to proceed with M&A appears to have made transactions more difficult.

In fact, there have been several cases where M&A deals failed to materialize due to the lack of approval from antitrust authorities in various countries. A representative example is the collapse of Applied Materials' acquisition of Japan's Kokusai Electric in March due to delays in the review by China's antitrust authority.

SK Hynix, which acquired Intel's NAND flash business, has completed antitrust reviews in 7 out of 8 countries and is awaiting the results of China's review.

However, IC Insights emphasized that the possibility of large-scale M&A in the semiconductor industry should not be ruled out for the remainder of this year. Merger talks between Western Digital of the United States and Japan's Kioxia, ranked second and third in the NAND industry, still remain, and the possibility of Intel acquiring GlobalFoundries has also been reported in the media.

This content was produced with the assistance of AI translation services.