Semiconductors

Broadcom grows its way to strategic dead end

7 Nov 2017

The acquisitive chip company has become so big that it needs to take larger and riskier bets to maintain its super-charged expansion. Its $130 bln unsolicited offer for Qualcomm qualifies on both counts. If successful, Broadcom will be short of targets that can move the needle.

NXP is key piece in $105 bln chipmaker jigsaw

7 Nov 2017

If Qualcomm wants to fight an unsolicited offer from Broadcom, one logical move is to complete its own $38 bln deal for automotive chip specialist NXP. A year later, that price looks low. Qualcomm now has a double reason to raise it – but the timing is out of its hands.

Broadcom deal cements boutiques’ M&A takeover

6 Nov 2017

Moelis is heading up the chipmaker’s $105 bln Qualcomm bid. It’s not the largest transaction an independent adviser has led, but it’s striking for one so dependent on financing. With smaller firms now prominent in most big deals, the bulge bracket risks becoming just dumb money.

Broadcom lenders shed prudence just as it’s needed

6 Nov 2017

The chipmaker’s advisers are “highly confident” of arranging finance for its $105 bln Qualcomm bid. Ample liquidity, low defaults and easing regulations have banks itching to lend. But rising corporate leverage and looser covenants pose big risks for anyone coming to the dance.

Investors put their chips on Broadcom mega-deal

3 Nov 2017

Fresh off its plan to move to the United States, the semiconductor firm is weighing a $100 bln bid for rival Qualcomm, Bloomberg reported. The industry is consolidating while patent and regulatory woes make the target vulnerable. An exuberant market reaction could seal the deal.

Trump follows Obama’s lead on Chinese chip deals

14 Sep 2017

The U.S. president blocked a $1.3 bln takeover of Lattice Semiconductor. It’s not a new position: his predecessor was sensitive to Beijing’s ambitions and nixed a similar acquisition. With scrutiny likely to intensify, buyers and sellers can save face by rethinking these mergers.

Samsung rides the semiconductor cycle to new peak

7 Jul 2017

The South Korean firm expects a record quarterly operating profit of $12 bln, thanks to soaring demand for memory chips. Rivals are boosting supply, and prices will probably fall. Still, Samsung's size and diversity will help it handle the sector's inevitable boom and bust.

NXP activists have a good shot at a sweeter offer

31 May 2017

Qualcomm is short of support for the purchase of its Dutch rival for $47 bln including debt. A rally in the chip sector has eroded the premium, and Qualcomm is desperate for diversification. A price hike looks needed to get NXP's owners – including agitator Elliott – on side.

Twin aims push Toshiba, Western Digital to a deal

24 May 2017

The Japanese firm needs cash quickly while its U.S. partner hopes to buy its chip unit on the cheap. Yet Toshiba wants certainty and Western can’t afford to see a rival steal the prize. An $18 bln bid by Western shows the forces pushing the two sides toward an agreement.

Deep-learning chips getting artificially inflated

9 May 2017

Circuitry first produced for videogames now powers advances in the hot field of self-learning computers. That has helped double Nvidia's market value to over $60 bln in less than two years. The fate of graphics chips in bitcoin and new developments at Google may hint at slower growth.

Toshiba and Western Digital need to get along

9 May 2017

The ailing Japanese giant has warned its U.S. partner not to derail the auction of a key chip unit. Toshiba needs a full price to offset its nuclear losses while Western Digital wants to buy the business in a fire sale. There's not much common ground.

Samsung’s choice of Plan A doesn’t quite add up

27 Apr 2017

The South Korean giant's board rejected a restructuring pushed by Elliott, the hedge fund. Possible legal changes do indeed threaten the transformation. But that does not justify ruling out any future overhaul. Investors deserve an answer on how it will fix its odd structure.

Toshiba’s $18 bln sell-off breaks the mould

3 Apr 2017

Foreigners rarely get to buy big Japanese outfits. Even when they do, the company is either in deep trouble or at least needs some attention from a new owner. Toshiba's memory chip unit is a huge, healthy business in a concentrated market. No wonder bidders are queuing up.

Toshiba has bigger headaches than share stigma

15 Mar 2017

Relegation to a lesser section of Tokyo's stock market would be humiliating, and prompt some forced selling. A delisting would hit investors harder. Whatever happens to the shares, management has more existential problems to fix, especially in its nuclear unit.

Chipmaker’s chairman short-circuits shareholders

10 Mar 2017

The man leading Cypress Semiconductor's board also helps run a Beijing-backed private equity firm that's buying a tech outfit Cypress eyed in the past. Cypress' recently departed founder now wants the chairman ousted. The governance and conflicts could fry the corporate wiring.

Toshiba memory-chip selloff is drastic medicine

14 Feb 2017

The Japanese group unveiled a $6.3 bln writedown, forecast negative equity and parted company with its chairman. The delivery was chaotic but the message well-telegraphed. The possible sale of a majority of its most valuable unit is new, and reveals the depth of its crisis.

Samsung hits a sweet spot in new technology cycle

6 Jan 2017

The world's biggest smartphone-maker expects fourth-quarter operating profit to top $7.7 bln, smashing expectations. As more devices move to new-generation memory chips and displays, Samsung's early investments in those areas are starting to pay off. That bodes well for 2017.

Renesas programs model outbound Japan deal

13 Sep 2016

The world's No. 3 chipmaker has agreed to buy U.S. peer Intersil for $3.2 bln. Unusually for a Japanese buyer, Renesas has large, clear synergy targets. These are mostly based on higher sales but if achieved, would more than cover the deal's near-$1 bln premium.