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Home > News > Infineon advances into the top ten of global chips

Infineon advances into the top ten of global chips

If M&A is a constant film in the semiconductor industry, then the change is only the protagonist in the stage. This time, the main characters and supporting actors are Infineon and Cypress.

On June 3, Infineon officially announced that Infineon and Cypress signed a definitive agreement, Infineon will acquire Cypress at a cash price of 23.85 US dollars per share, for which Infineon will pay 9 billion Euro (about $10.1 billion).

According to the ranking of global TOP10 semiconductor manufacturers in 2018, Infineon will surpass NXP, Western Digital, and STMicroelectronics to advance into the top ten global rankings and become the world's eighth-ranked semiconductor manufacturer.

Since then, Infineon will surpass NXP to become the world's second largest automotive semiconductor company. Prior to this, Infineon was second only to NXP in the global automotive electronics market. It has a global market share of nearly 20% in the power semiconductor market. It ranks first in the world and leads the world in safety chip market.

On the one hand, Infineon intends to expand through capital mergers and acquisitions; on the other hand, Cypress has continuously transformed its business front in recent years. In 2017, Cypress announced that it will fade out of the low-end NORFlash market. After experiencing the downturn in the information products market such as consumer electronics, mobile phone market and PC, the main target-oriented manufacturers in the automotive electronics and industrial markets are The impact of this wave is relatively minor.

At the end of 2018, Cypress still ranked second in the world with a market share of 20.9%. Taiwan's Wanghong ranked first in the world with 21% market share. China's Zhaoyi Innovation ranked fifth with a market share of 10.7%. .

However, Cypress's main business focus is twofold: the Memory Products Division (MPD) and the Micro Control and Networking Division (MCD). The Microcontroller Division (MCD) is Cypress's largest source of revenue, with connectivity products (Wireless and USB) accounting for a large percentage.

It is reported that Infineon's purchase price competition Plath was 50% higher at the time, which is full of sincerity. The combination of the two sides has the complementarity of the business chain and the influence of the integrated semiconductor industry.

First, Cypress's connectivity products are exactly what Infineon needs. Infineon's security expertise, combined with Cypress's connectivity technology, will enable the company to accelerate into new IoT applications in the industrial and consumer markets.

In automotive semiconductors, the expanded combination of microcontrollers and NOR flash memory will offer great potential, especially in the application of advanced driver assistance systems and new automotive electronic architectures.

Second, mergers and acquisitions in the industry, as well as the deterioration of the market environment, require new growth through mergers and acquisitions. At the time when Qualcomm acquired NXP in a big way, Infineon hoped to acquire ST and become the new overlord of automotive semiconductors, but this move was finally lost.

Previously, the old rival Japan Renesas acquired IDT for $6.7 billion, which directly made Infineon feel the pressure. It can be said that under the "forced" of the two major competitors, Infineon finally decided to invest heavily in mergers and acquisitions.

Infineon CEO Reinhard Ploss said: "Through this transaction, we will be able to provide customers with the most comprehensive product portfolio, connect the real world and the digital world, and open up new growth potential in the automotive, industrial and Internet of Things sectors."

Infineon will strengthen the core of structural growth and apply the company's technology to a wider range of areas. This will accelerate the foundation for strengthening the company's profit growth in recent years.

For domestic semiconductor manufacturers, Infineon and Cypress's revenue in the Chinese mainland market accounted for 25% and 33% respectively, while domestic MCUs and analog ICs were weaker in global competition, and Infineon successfully acquired Cypress will increase the competitive pressure of domestic manufacturers.