Possible Mergers in the Semiconductor Industry

Possible Mergers in the Semiconductor Industry

The semiconductor industry might be seeing some powerhouses merging in the coming months. Acquisition rumblings between Cypress with ISSI and AMD possibly splitting or a possible spin off has been the talk recently.

Cypress and ISSI are known competitors with significant market share in the SRAM market. In Germany, ISSI believes the combined market share between Cypress and ISSI would exceed 70% and that the combined company would be the sole supplier of SRAM to German automotive manufacturers. Rumors of acquisition began in May when Cypress sent a letter to the board of directors of ISSI, proposing an acquisition of all outstanding shares.  ISSI stated that the merger has come to a halt due to anti-trust concerns. Recently a third player, Uphill has shown interest in buying ISSI as well. The final outcome has yet to be determined and should be finalized in a meeting next week. If the Cypress and ISSI merger comes to fruition, it will bolster Cypress’s offerings in the automotive segment, which is growing thanks to onboard infotainment systems.

It is no secret that AMD (Advanced Micro Devices, Inc) has been struggling to make a profit.

AMD has all but recently maintained a steady position right behind Intel, especially in terms of desktop hardware, but they have not been able to keep up with the huge shift to mobile devices. AMD is due for some kind of restructuring which leads to talk about various partnerships and buy-outs. AMD’s spokesperson Sarah Youngbaurer denied the rumors, “While we normally would not comment on such a matter, we can confirm that we have no such project in the works at this time. We remain committed to the long-term strategy we laid out for the company in May at our Financial Analyst Day.” This plan includes sacrificing the market of low-end PCs, smartphones and IoT devices and instead focusing on gaming and immersive computing and data.

Though AMD might or might not admit to buy out ideas, some kind of split or spin off must occur if this company wants to survive. One option under consideration isseparating AMD’s graphics and licensing business from its server business, which sells processors that power data centers. While large rivals such as Intel have deeper pockets to fund research on new products, AMD faces declining cash flows and has a more modest balance sheet.

Mergers and Acquisitions are expecting to impact various aspects of the supply chain of semiconductor industry, such as price, lead time, availability, new product introduction and obsolesce. With Advanced MP’s deep connections in the open market and strong global network, we are able to provide the best support to our customers anywhere anytime.