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China's chip quest to intensify sector's record M&A run

Chipmakers acquire peers to expand ahead of an explosion in demand for all kinds of semiconductors

Published Thu, Nov 26, 2015 · 09:50 PM
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Tokyo

CHINA'S unabashed interest in foreign chipmakers in an already record year of deals has been quickly read by rivals as a sign that mergers and acquisitions (M&As) will get more competitive and target companies will get more expensive.

Chipmakers have announced over US$80 billion worth of M&As in 2015. Chipmakers are acquiring peers to expand capacity and capabilities ahead of an explosion in demand for all kinds of semiconductors necessitated by the Internet of Things. "The days of growing organically through technological advantage are over," said Hidetoshi Shibata, chief financial officer of Japan's Renesas Electronics Corp. "Scale and having a wide variety of solutions have become crucial." But a Chinese buying spree could push the value of merger targets beyond rivals' reach.

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