After a record-high start in the first quarter of 2021, semiconductor merger and acquisition announcements cool off a bit without the "megadeals" seen in 2020, according to IC Insights.

After a surge in semiconductor merger and acquisition announcements in the second half of 2020, the strong M&A momentum carried into the beginning of 2021, with purchase agreements for chip companies, business units, product lines, and related assets reaching a total value of US$15.8 billion in the first quarter of 2021, setting a record-high level for the first quarter of a year.

However, the pace of semiconductor acquisition agreements fell back over the next five months of 2021, putting this year's total M&A value at US$22.0 billion for the January-August timeperiod, IC Insights indicated.

The combined value of semiconductor M&A agreements announced in the first eight months of 2021 was slightly below the total for the same periods in 2019 and 2020 (US$24.7 billion and US$23.4 billion, respectively), IC Insights said. The full-year 2020 M&A value jumped to an all-time annual record of US$117.9 billion.

Between September and December 2020, the combined value of semiconductor M&A deals amounted to US$94.5 billion with the announcements of four megadeals in the four-month period: Nvidia's planned US$40 billion acquisition of Arm; AMD's pending US$35 billion purchase of Xilinx; Marvell Technology's completed US$10 billion takeover of Inphi; and Intel's announced US$9 billion sale of its NAND flash business and 300mm fab in China to SK Hynix. Three of these four 2020 megadeals are still waiting for regulatory clearance, including China's approval in the midst of its trade war with the US.

Like last year, the 2021 M&A total could get a significant boost in the next several months if agreements are reached in potential megadeals that have been reported in the press and other major moves by companies looking to strengthen their positions in high-growth markets, IC Insights noted. In the summer, Intel was reportedly in talks to buy GlobalFoundries for about US$30 billion to strengthen its renewed wafer foundry efforts, and a possible US$20 billion-plus merger was being explored by NAND flash-memory partners Western Digital (owner of SanDisk) and Kioxia. However, GF and Kioxia are now believed to be moving ahead with planned initial public offerings (IPO) of stock in the fourth quarter of 2021.

By DIGITIMES