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Will 2023 be the year of semiconductor acquisitions?

German chipmaker Infineon Technologies is on the lookout for suitable companies, according to its CEO Jochen Hanebeck. While not naming any specific semiconductor firms, he provided two hints about future acquisition targets. First, the companies that operate in electromobility, autonomous driving, renewable energy, data centers, and the Internet of Things (IoT). Second, startups that need to be sufficiently well financed and want to join a corporation.

Infineon has recently completed two successful acquisitions. First, it snapped International Rectifier for $3 billion in 2014 to complement its automotive semiconductor offerings. Next, in 2019, Infineon acquired Cypress Semiconductor for $10 billion to bolster its presence in IoT silicon.

Source: Reuters

The news about Infineon being ready to spend billions on semiconductor acquisitions comes at a time when some industry analysts forecaste a decline in chip market growth in 2023. On the other hand, Infineon is tying its acquisition plans to boost growth in power, sensors, and artificial intelligence (AI). It’s important to note that this corporate move syncs with its earlier announcement to build a fab in Dresden to expand 300-mm capacity.

German chipmaker’s ambitions for semiconductor industry acquisitions is also an important development in the backdrop of two critical issues that seem to cloud semiconductor industry prospects in 2023. First and foremost, there is a forecast for a decline in capital spending on semiconductor production equipment. Second, the U.S. semiconductor export sanctions on electronics companies in China could significantly impact chip sales.

The semiconductor industry is starting 2023 with conflicting signals. There is good news and not-so-good news. But the fact that the U.S. Chips Act will start to take shape this year and there is talk about the European Chips Act amounting to 15 billion euros tilt the balance toward a vibrant year for the chips industry.

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