Semiconductors are a critical part of the modern world, from medicine, transportation and aerospace, to energy and electronics manufacturing. It’s probably something you don’t often think about, but without semiconductors, everyday life would be very different from what it is today. Over the past 50 years, semiconductors have drastically changed the way we design and develop devices—creating lighter, more durable and more powerful products. They’re part of just about every electronic device you use each and every day, including your phone, laptop and even your car.
Therefore, it only makes sense that when the semiconductor industry sees changes, so, too, does the electronics manufacturing industry.
The semiconductor industry has seen a trend of mergers and acquisitions (M&As) in recent years, creating an environment of competition, innovation and growth, while limiting the number of suppliers and design resources available.
For example, in 2018, Broadcom Inc. announced its acquisition of CA Technologies, a nearly $19 billion deal. This year, Renesas Electronics Corporation acquired Integrated Device Technology, and with it, their products and applications. Other recent, major acquisitions include Infineon’s acquisition of International Rectifier, and Analog Devices acquisition of Linear Technology. These M&As over the past few years are consolidating market share and combining technologies to create the latest designs, driving sales for the industry.
These M&As are a result of large companies drastically reducing debts, leaving capital available to take over more of the market. With higher cash reserves and available credit, too, semiconductor companies have gained the momentum necessary for their growth. As one of the United States leading industries, semiconductor companies have recently been able to afford these massive multi-billion dollar deals.
Changing the market
These changes in the semiconductor industry are expected to streamline product lines, reduce the time it takes for new products to come to market, innovate current technology and reduce product development costs. With companies in tough competition and crossing verticals—from self-driving cars and AI, to cloud-based computing and smart home technology—they’re looking to design engineers to put them ahead of the curve.
With fewer and larger companies on the market, it’s expected that electronics manufacturers will have a streamlined selection of more advanced semiconductors to choose from, giving engineers the ability to design more compact and durable devices. On the other hand, it’s expected that electronic device manufacturers will have fewer choices when it comes to suppliers as companies and technologies continue to consolidate.
In addition to improved product design capability, we except to see a reduction in the time it takes to bring a product to market. Thanks to advancing technology and predictable product capabilities, electronic devices can be designed, manufactured and released in a reduced amount of time, at a lower cost.
These are just a few of the many implications that we can expect to see in the coming years, as a result of semiconductor industry M&As. At ACDi, we’re always looking to the future to prepare for what the world of electronics manufacturing holds next.
For more information on electronic manufacturing, reach out to us at ACDi. Give us a call at 301-969-2742, or visit us online to request a complimentary consultation.