Advanced Micro Devices' US$35 billion purchase of semiconductor maker Xilinx pushes 2020 towards a record year for chip deals, as large tech companies rush to consolidate the increasingly competitive industry.[LONDON] Advanced Micro Devices' US$35 billion purchase of semiconductor maker Xilinx pushes 2020 towards a record year for chip deals, as large tech companies rush to consolidate the increasingly competitive industry.
There have now been US$110 billion of deals announced in the semiconductor industry this year, led by Nvidia's US$40 billion bid for Cambridge, England-based chip designer Arm, according to data compiled by Bloomberg. The Xilinx deal makes 2020 the biggest year at this point on record for pending and completed deals involving semiconductors, the data shows.
The high-water mark for semiconductor deals was reached in 2016, when US$122 billion in transactions were struck for the entire year. If acquisitions continue at the current pace, 2020 will easily top that level. The largest deal of 2016 was SoftBank's US$24 billion purchase of Arm. Competition in the semiconductor industry is heating up as companies that were once customers, such as Apple, design their own chips and established players like Nvidia branch out into new areas.
One adviser estimates that there are about 75 public chip companies now and that number could be cut in half because of consolidation in the next few years.
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