A fresh wave of mergers and acquisitions reflects the semiconductor sector's determination to pull itself out of the downward spin by building expertise in wireless technologies – billed as the next high-growth sector. Several publicly listed semiconductor suppliers have negotiated innovative deals and co-operation agreements with each other that are seemingly designed to share both know-how and risk.
Semiconductor maker STMicroelectronics (STM) picked up the microelectronics division of French telecommunications equipment maker Alcatel to boost its research and development (R&D) expertise in the field of high-speed wireless and wireline chipsets. The French-Italian group paid just €390 million in cash for a division with turnover of €350 million, reflecting a continued slump in valuations. As part of the agreement, Alcatel and STM will jointly develop digital subscriber line (DSL) chipsets, extending an existing agreement to work together on designing chipsets for mobile phones.
Within a day of announcing the deal, STM revealed that it would sell the mixed signal business of Alcatel Microelectronics to AMI Semiconductor, a privately owned maker of integrated circuits. AMI picked up two fabrication facilities in Belgium and 1,050 employees. The Idaho-based company will provide manufacturing services for STM.
US semiconductor group Texas Instruments (TI) bought Germany's Condat to beef up its mobile phone chip know-how. TI gains two additional wireless software R&D centres in Europe and half of Condat's 380 employees for €105.7 million.
In another transatlantic deal, Ireland's chip designer Parthus agreed to a merger with the intellectual property licensing business of DSP, a US digital signal processing company. The new company, called ParthusCeva, will focus design efforts on technologies for voice over Internet protocol and the wireless technologies Bluetooth and 3G. The combined group says it has $80 million (€89.8m) in cash, 330 employees dedicated to R&D, and nine out of the top ten semiconductor companies as customers.
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