The Week In Review: Manufacturing

Chipmakers
Christopher Rolland, an analyst at Susquehanna International, expects to see more merger and acquisition activity in the IC industry heading into 2018. “M&A activity slowed in 2017, but the year is going out with a bang!” Rolland said in a recent research note. Towards the end of 2017, for example, Broadcom made a bid for Qualcomm, while Marvell announced intent to buy Cavium.

In 2017, about 10% of all semiconductor companies were acquired, according to the analyst. In comparison, 20% to 25% of all U.S. semiconductor companies were acquired in the 2015 and 2016 timeframe, he said.

What about 2018? “We assert many attractive candidates remain, and with the help of our Accretion Index, we highlight several attractive takeout candidates for 2018, including Lattice, IDT, MaxLinear, and Microsemi, whose mantra remains ‘you’re buying till you get bought,’ ” he said, noting that Knowles and MACOM are potential takeover targets.

————————————-

As stated above, Broadcom has made an unsolicited bid to acquire Qualcomm. Qualcomm has rejected Broadcom’s bid. Qualcomm has also rejected Broadcom’s move to replace Qualcomm’s board.

As reported, Jay Y. Lee, vice chairman of Samsung Electronics, was recently sentenced to five years in jail for bribery. Now, South Korean prosecutors are seeking a 12-year jail term for Lee, according to multiple reports.

Market research
What will happen at the upcoming Consumer Electronics Show in Las Vegas? Neil Mawston of Strategy Analytics said the big three smartphone trends are AI, Bitcoin phones and 5G.

In another trend, the rate of adoption of smart speakers continues to defy expectations. Amazon and Google share 92% of the global market, according to Strategy Analytics. “Competition in the Smart Speaker market is becoming fierce as the fledgling category welcomes new entrants such as Harman Kardon, Sony and Sonos, all of whom have a much richer audio heritage than Amazon or Google. The Silicon Valley giants have reacted by improving the audio quality of their flagship devices but their real advantage over the competition is their ability to shift significant volumes of their aggressively priced Echo Dot and Google Home Mini that will keep them well ahead of the competition for the foreseeable future,” said David Watkins, an analyst at Strategy Analytics.

“The competitive landscape will heat up even further in 2018 and we expect to see the introduction of a new wave of third party devices that support one or even both of the Alexa and Google Assistant voice AI platforms,” he said. “All of this activity will of course pile more pressure on Apple whose own Siri-based HomePod speaker failed to materialize in time for the holiday season and will now make its debut in 2018. Apple is falling well behind Amazon and Google in the AI and virtual assistant race and its famed ability for hardware innovation may not prove enough to counter the fast-paced AI-software innovation of its rivals.”