ST is considering the acquisition of Nordic
Update Time: 2021-05-26 10:27:49
In recent years, the semiconductor market, mergers and acquisitions are frequent, recently, there are media rumors that STMicroelectronics will want to buy its rival Nordic Semiconductor (Nordic Semiconductor), the two sides have entered the preliminary stage of negotiations. Affected by this, Nordic shares jumped 11%.
Nordic is a fabless semiconductor company, specializing in the development of wireless technology to support the Internet of Things. Focus on the BLE market, in addition to the launch of products such as ANT +, Bluetooth mesh, Thread, ZigBee and so on. Especially in the BLE market, Nordic has become a deserved leader.
According to the data research firm TSR report, the global BLE company market share in 2018, Nordic occupies the top of the list with 40% share, followed by Dialog (11%), TI (10%), ST (7%), etc. Meanwhile, according to SIG data, Nordic is far ahead of its peers in BLE end-product certification, with a serious end-product share of 46% in the second quarter of 2020.
To give an intuitive example to see how powerful Nordic is in the BLE market in the end, there are data comparisons have been made, in 2018, Nordic's one-year revenue in the BLE market has reached about half of the overall revenue of China's domestic BLE manufacturers, far exceeding the second.
Nordic is also accelerating the layout of the industry chain, including investment in networking protocols, the horizontal development of 2.4G product lines, and complementing the 2.4G target chips in the high school and low segment markets. Layout of LTE-M and NB-IoT long-distance network access, so that home mesh network and LAN integration; provide a complete Internet ecosystem companies BLE transmission protocol, etc.
Nordic share price trend
Strong technical capabilities, coupled with a high share of the market share, so that Nordic's performance in the stock market can be described as a ride, as a company listed on the Oslo Stock Exchange in Europe, in the European market is a weak situation, Nordic share price instead all the way up, has now reached a relative high in history.
When the news of ST's acquisition of Nordic broke, Nordic's share price rose by 11% on the same day, but Nordic's share price had been rising for about a week before, with a total market value of nearly $5 billion.
Nordic has become the only remaining semiconductor company headquartered in Europe, and its contemporaries, such as Ember and Dust Networks, have been scraped clean by Silicon labs and Linear Technology, but Nordic, however, is growing rapidly and has not only achieved the leading position in the global BLE market, but also has the most powerful BLE protocol stack development team in the world.
For the semiconductor giants, European semiconductor companies are just the food on the table, especially in the niche area has a strong strength of the company, for the semiconductor giants have a strong attraction. Once Nordic is in the bag, it will undoubtedly significantly strengthen the company's strength in the BLE field and even the IoT field.
In the past few years, frequent mergers and acquisitions in the semiconductor field, but most of them are concentrated in small companies, by 2013, private semiconductor companies almost dried up, so there is no merger situation, the more money wins, the winner takes all, the big one is constant, large semiconductor mergers and acquisitions began to become more.
At present, large semiconductor companies mergers and acquisitions have been not just to play the scale effect or just looking at the immediate revenue, but to build the future competitiveness of the Internet of Things, autonomous driving, artificial intelligence and other fields, for the future business growth points for the layout, look back at the recent years of semiconductor large mergers and acquisitions, no more than this.
At the same time, some industry insiders revealed that ST's only loss-making project is in the wireless product line, apparently ST has the motive to acquire Nordic.
However, some analysts pointed out that although strategically, the acquisition of Nordic can strengthen the advantages of STM positioning in the IoT field, and IoT is one of the fastest growing market segments expected for 5G development. However, preliminary analysis shows that the deal will hardly create value for STM because: assuming synergies equal to 10% of Nordic's revenues (about 60% of eBIT), analysts believe that the NPV will be slightly less than the 30% premium required to justify the bid.
Nordic CFO Paal Elstad responded by saying that he had no knowledge of ST's acquisition of Nordic. ST also had no comment on the matter.