Chip Mania! (Tech chips that is….)

Yesterday saw the announcement that Singapore’s Avago is to pay $37bn in cash and stock for its US-based rival Broadcom. The chip industry appears to be a potential source of some very big deal rumours currently. The last month alone, Apple and Intel have both been linked to the UK’s Arm Holdings and Intel is being associated with Qualcomm’s chipmaking business. Market valuations for both potential deals have seen the companies valued at $36bn and $74bn, respectively. 

Add in to the mix the $16.7bn takeover of US-based Freescale Semiconductors by NXP Semiconductors of the Netherlands, announced in early March this year, showing that consolidation across the industry is reaching new levels. 

The Avago/Broadcom transaction is the largest deal announced in this sector, and, along with the Freescale/NXP deal, dwarf the previous highest value deal recorded, when Texas Instruments acquired Burr-Brown Corporation back in August 2000 for $7.6bn! 

2015 has seen a number of big industry consolidation takeovers announced, demonstrating that the stockpiles of cash that many corporates have been accumulating and unwilling to spend for the last few years are now starting to be put to good use.