ADI’s acquisition of Maxim is approved by China!

On August 24, ADI officially announced that the acquisition of Maxim by ADI has obtained anti-monopoly approval from the State Administration for Market Regulation of China!

 

So far, the transaction has obtained all necessary regulatory approvals. ADI and Maxim expect that the transaction will be completed on or about August 26, 2021 after meeting other customary closing conditions.

 

As early as last July, ADI announced that it had reached a final agreement with Maxim to merge, and this acquisition was also ADI's largest transaction. It is reported that the transaction involved an amount of 20.91 billion U.S. dollars, and the combined company's valuation will exceed 68 billion U.S. dollars (approximately RMB 476 billion).

 

According to the terms, after the transaction is completed, ADI’s existing shareholders will own approximately 69% of the combined company’s shares, while Maxim’s shareholders will own approximately 31% of the shares.

 

According to Weike.com, ADI is the world's leading high-performance semiconductor company. Founded in 1965, after more than 50 years of development, its digital-to-analog converters, optical fiber and optical communication chips, MEMS and sensors have covered industries, communications, Various fields such as automobile electrification and consumer electronics.

 

Maxim is an engineer-oriented technology company with a comprehensive high-performance semiconductor product line, as well as industry-leading design tools and support, providing customers with high-efficiency power supplies, high-precision measurements, reliable interconnections, reliable protection, and intelligent processing. And other basic simulation programs.

 

The troika driving ADI's global layout

 

According to the data, prior to the acquisition of Maxim, ADI has also completed many well-known semiconductor acquisitions in history. With multiple acquisitions, ADI has continued to consolidate and strengthen its own competitiveness, laying a solid foundation for its business development and growth.

 

In particular, business development in the three major areas of industry, communications and automobiles has become the troika driving ADI’s revenue growth and global layout.

 

The industrial field is ADI's largest business in recent years.

 

In 2018, ADI successfully acquired OtoSense. OtoSense is a start-up that focuses on the development of "sensing interpretation" software that learns and recognizes sound or vibration, and can detect potential problems in factories or car engines as early as possible.

 

In 2019, ADI announced the acquisition of Test Motors, a company specializing in predictive maintenance of motors and generators. The products and services provided by Test Motors can detect motor failures in advance, avoid affecting the production process, and provide suggestions on how and when to perform maintenance.

 

ADI plans to combine OtoSense's software with Test Motors' monitoring capabilities to create a solution that will provide more advanced and comprehensive health monitoring for machines by capturing a wider range of potential faults.

 

In the field of communications, ADI is even better.

 

In 2014, ADI acquired the RF chip manufacturer Hittite for US$2 billion (approximately RMB 13.98 billion), and achieved full frequency coverage from 0 to 110 GHz RF frequency band, microwave frequency band, and millimeter wave frequency band. , Has a complete radio frequency product solution.

 

In 2016, ADI successively took down three companies, SNAP Sensor SA, Sypris electronics LLC, and Innovasic to further improve its Internet of Things technology.

 

Among them, SNAP Sensor SA has cutting-edge optical technology and vision software and algorithms and professional knowledge;

 

Sypris Electronics LLC is in a leading position in the fields of network security, security systems, software products and technologies;

 

After acquiring Innovasic, it can help ADI master a complete set of multi-protocol industrial Ethernet solutions, and add key supporting technologies to the ADI intelligent automation solution product portfolio suitable for industrial automation and industrial Internet of things, and better solve the network communication Reliability.

 

In the automotive field, in addition to strengthening independent research and development, ADI has also strengthened its strength in this field through several active mergers and acquisitions.

 

In 2016, ADI spent $14.3 billion (approximately RMB 100.84 billion) to acquire Linear Technology, a high-performance power supply manufacturer in the same year. Linear Technology's high-performance power supply technology can make the package volume of the power module extremely small, improve the efficiency of the power supply, and also improve the electromagnetic compatibility, greatly reduce the interference of external radiation, and further meet the strict automotive application requirements in the future.

 

Although the transaction is not large in terms of the amount of mergers and acquisitions, the combined products of the two extensively involve data converters, power management, amplifiers, interfaces, RF and Weibo products, etc., helping ADI to become a global leader. Analog technology company.

 

In November 2016, ADI announced the acquisition of solid-state laser beam control technology from Vescent Photonics Inc. This acquisition consolidated ADI’s position as a major automotive safety system technology partner for next-generation ADAS and autonomous driving applications, and consolidated ADI’s presence in 20 years of history in promoting automotive safety.

 

In addition, in March 2018, ADI announced the acquisition of Symeo GmbH, an automotive radar company. Symeo's innovative signal processing algorithms will enable ADI to provide customers with a radar platform whose angular accuracy and resolution have been significantly improved.

 

It is not difficult to find that in the past few years, many semiconductor mergers and acquisitions initiated by ADI have played a positive role in opening up new fields and enhancing core competitiveness.

 

Together, can they hit TI's throne?

 

It is worth noting that in the latest 2021 report released by the research organization IC Insights, the analog IC sales of 10 companies totaled US$35.4 billion, accounting for 62% of the total US$57 billion in the analog IC market last year.

 

It can be seen that TI firmly occupies the first place with a sales of 10.9 billion U.S. dollars in analog ICs and a 19% market share. TI's analog IC sales increased by approximately 650 million US dollars compared with 2019, an increase of 6%. TI’s analog revenue in 2020 accounted for 80% of its IC sales of $13.6 billion and 75% of its total semiconductor revenue of $14.5 billion.

 

 

The second-ranked analog device company is ADI, whose analog IC sales in 2020 fell by 1% to $5.1 billion, accounting for 9% of the market share. Maxim, on the other hand, ranked 7th, and its analog IC sales increased by 8% to 1.8 billion US dollars, accounting for 4% of the market share.

 

There is no doubt that it will be difficult to catch up with TI's dominance for a while only relying on ADI's "single fight". The merger of ADI and Maxim will not only enrich the product portfolio of both parties and increase the diversity of solutions, but also use the advantages of the merger to strengthen its market leadership and provide for further expansion of the market. A favorable guarantee.