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Strategy Analytics: Automotive Semiconductor Vendor Top Spot No Longer Attainable Through M&A
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TMCNet:  Strategy Analytics: Automotive Semiconductor Vendor Top Spot No Longer Attainable Through M&A

[July 13, 2020]

Strategy Analytics: Automotive Semiconductor Vendor Top Spot No Longer Attainable Through M&A

The ability to create a credible gap between rivals through acquisition will be increasingly difficult for automotive semiconductor vendors with the market share ROI (return-on-investment) from M&A (merger and acquisitions) effectively coming to an end. The Strategy Analytics Powertrain Body Chassis and Safety (PBCS) service report, "From Supply Chain to Value Network - the Changing Face of Automotive Competitive Landscape Dynamics (http://sa-link.cc/1pV)," analyzes the largest and most significant mergers and acquisitions in the automotive industry, with particular focus on semiconductor vendors, as well as looking at some of the major Tier 1 activity.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200713005565/en/

Figure 1. Market Share Gap between #1 and #2 Automotive Semiconductor Vendors Post Deal (Graphic: Business Wire)

Figure 1. Market Share Gap between #1 and #2 Automotive Semiconductor Vendors Post Deal (Graphic: Business Wire)

The Renesas-NEC merger started the last decade, allowing Renesas Electronics to command the top spot for several years before NXP's acquisition of Freescale (News - Alert) changed the rankings in 2015. Moving into the next decade, Infineon's acquisition of Cypress will again change the rankings at the top. With each of these deals, the resulting entity has been able to leapfrog rivals to the number one spot, but the ability to create a credible gap between rivals through acquisition will be increasingly difficult as the market share ROI from M&A exercises drops to zero.

"We shouldn't expect the current round of M&A activity, e.g. ADI buying Maxim, to result in a demonstrable shift in the top tier of automotive semiconductor vendor share rankings." notes Asif Anwar, report author and PBCS Service Director. "They do validate a focus on capturing capabilities to capitalize on automotive industry trends related to connectivity, electrification, autonomy, infotainment and mobility services,"

Mr. Anwar continued, "The transformation from an automotive supply chain to a value network is evidenced by OEMs (Original Equipment Manufacturers) looking to work directly with companies that can provide strategically vital capabilities, and this will be the focus for future M&A activity. Whether the transformation from an automotive supply chain to a value network becomes a permanent fixture will dictate which future partnerships, mergers, acquisitions and divestments create the next major seismic shift in the automotive competitive landscape."

Source: Strategy Analytics (News - Alert), Inc.

#SA_Automotive

About Strategy Analytics

Strategy Analytics, Inc. is a global leader in supporting companies across their planning lifecycle through a range of customized market research solutions. Our multi-discipline capabilities include: industry research advisory services, customer insights, user experience design and innovation expertise, mobile consumer on-device tracking and business-to-business consulting competencies. With domain expertise in: smart devices, connected cars, intelligent home, service providers, IoT, strategic components and media, Strategy Analytics can develop a solution to meet your specific planning need. For more information, visit us at www.strategyanalytics.com.

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