Mergers & acquisitions in the semiconductor market. Who is next?

Over the past six months, we have seen a wave of consolidation in the semiconductor industry. Last year, the biggest semiconductor takeover globally failed when our partners Qualcomm and NXP could not reach agreements due to China's position. And this year two major transactions took place within a month: NVIDIA is to acquire Mellanox, and ON Semiconductor is to become the owner of Quantenna Communications. Let's explore these important deals that open up new perspectives in electronics development.

Qualcomm // NXP

Qualcomm, the American semiconductor and telecommunications equipment company, has long played a leading role in the sector of mobile chips and wireless modems. In October 2016, it decided to take the next step to conquer the market and announced the purchase of NXP, a Dutch global semiconductor manufacturer.

Last summer, it became known that the $44 billion deal was cancelled due to the trade war between China and the United States. Qualcomm did not get the approval of the Chinese antitrust regulator who reviewed the deal.

NVIDIA + Mellanox

On March 11, 2019, two world leading companies in high-performance computing (HPC), the U.S. company NVIDIA and the Israeli one Mellanox, announced their union. As it became known, NVIDIA was acquiring Mellanox for $6.9 billion.

Previously the companies have achieved global accomplishments through collaboration. The latest success of their work was observed by the U.S. Department of Energy. This relates to Sierra and Summit—two fastest supercomputers in the world. Also, under the belt of NVIDIA and Mellanox, there are over 250 of the 500 world’s best supercomputers.

Accelerated computing with the technologies by NVIDIA and Mellanox will cover the demand for the giant data centers. This need has appeared as a result of the increase in AI opportunities and the amount of the data.

Representatives of both companies think that this acquisition will enable to “form a giant datacenter-scale compute engine” and to create a “computer of tomorrow”:

“This combination will foster the creation of powerful technology and fantastic opportunities for our people,” said Eyal Waldman, founder, and CEO of Mellanox.

ON Semiconductor + Quantenna Communications

Sometime later, on March 27, ON Semiconductor and Quantenna Communications—both headquartered in the United States—followed suit and agreed that ON Semiconductor will acquire Quantenna for about $1 billion, the deal is to close in the second half of 2019.

Quantenna’s experience and achievements in Wi-Fi technologies and software development will expand opportunities for ON Semiconductor on the industrial and automotive markets.

Promwad engineers are especially excited about the collaboration of NVIDIA and Mellanox because it is changing and shaping the future of data centers. We believe that this is a very promising direction, that is why we are focusing on the data center projects for our customers. These new designs are targeted at data center video streaming applications with hardware acceleration, digital communication and image processing, and AR/VR solutions.

We will monitor developments in the market, read our blog to stay tuned.