Analysis: Potential acquisition targets and buyers in analog semiconductors

Who will be the next acquisition target for the analog semiconductor industry? Who will be the "integrator" in this field?

After Texas Instruments (TI) spent $6.5 billion in the acquisition of National Semiconductor (NS), the industry made various speculations about the next M&A activity in the analog field.

Some people predict that the simulation field will set off a wave of acquisitions. Others also think that the pace of integration and acquisition (M&A) in the analog industry is gradually slowing down.

Because TI paid a high price for the acquisition of NS, many companies' stocks rose sharply, creating a seller-oriented market in the field of M&A. TI-National’s M&A deal is virtually “impacting the M&A industry,” Steve Sanghi, president and CEO of Microchip Technology, pointed out in an interview at the recent Embedded Systems Conference (ESC). After TI's astronomical price acquisition of NS caused shock in the semiconductor industry, the stocks of several chip makers rose to 35% to 40% in an instant.

Returning to the reality of the market, the time is ripe for the analog world to begin the acquisition. "The industry is now more interested in conducting mergers and acquisitions," said Steve Ohr, analyst semiconductor analyst at Gartner, when he was interviewed at the ESC.

However, this does not include large-scale mergers and acquisitions. Ohr pointed out that the best target for the current acquisition should be medium-sized companies with a scale of 100 million to 200 million U.S. dollars.

Although Ohr does not specify which companies will be potential targets for acquisition, the following are several possibilities:

Advanced Analogic Technologies - Continuous Revenue Deficit ...

The company recently announced that its 2011 first-quarter revenue was $20.5 million in 2011, which was lower than the $21.9 million in the first quarter of 2010 and the $24 million profit in the fourth quarter. Estimated net loss for the first quarter of 2011 was $7.7 million, or diluted earnings per share of $0.18, which included non-recurring patent litigation and severance related expenses. In contrast, the company’s GAAP net loss for the first quarter of 2010 was 4.2 million, or diluted earnings per share of 0.10 US dollars; in the fourth quarter of 2010 GAAP net loss of 3.3 million US dollars, or diluted earnings per share of 0.08 US dollars.

Intersil - too big to eat?

The company’s first-quarter net revenue was US$198.9 million, which was a 5% increase from the US$189.4 million in revenue for the first quarter of 2010 and a 3% increase from the US$194 million in the fourth quarter of last year. Compared to the $27.7 million in net income or diluted earnings per share of $27.2 in the first quarter of last year and the net income of $26.1 million in the fourth quarter of last year or the diluted earnings per share of $0.21, it was the first in 2011. Quarterly net income decreased by $14.1 million, or diluted earnings per share by $0.11.

Monolithic Power Systems - Strategic errors affect company development The company recently reported revenue of $4.45 million in the quarter, down from $4.71 million in the fourth quarter of last year and $5.33 million in the first quarter. GAAP net income is 1.9 million US dollars, GAAP diluted earnings per share of 0.05 US dollars. In contrast, the company settled GAAP net income of US$6.4 million in the quarter to the end of March last year, while GAAP diluted its earnings per share by US$0.17.

Power Integrations Inc. - Is the purchase price expensive?

The company released its quarterly revenue of $76.8 million, which is 7% higher than the first quarter of last year and a 5% increase from the fourth quarter of last year. Compared to the first quarter of last year, diluted earnings per share of 0.42 US dollars and fourth quarter diluted earnings per share of 0.30 US dollars in the first quarter of this year's net income of 990 million, diluted earnings per share of 0.33 US dollars.

Volterra Semiconductor Corp. - Is it hidden?

The company recently announced revenue of $34.2 million in the first quarter of 2011, which is 6% lower than the 36.3 million in the first quarter of 2010 and 4% lower than the $35.5 million in the fourth quarter of last year. GAAP net income is 2.7 million US dollars, diluted earnings per share of 0.10 US dollars; and the first quarter of last year net income of 7.7 million US dollars, diluted 0.30 US dollars per share, the fourth quarter of last year net income of 3.4 million US dollars, diluted 0.13 US dollars per share.

Who is the vendor or integrator who is interested in M&A?

Maxim Integrated Products Inc. - Strategic mergers and acquisitions Microsemi Corp. - Continued acquisition of niche companies in the military/aerospace industry On Semiconductor Corp. - Active acquisition plan Texas Instruments - It will take some time to digest. Acquisition of National Semiconductor soon


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