How fabless semiconductor company create global strategic value through M&A and synergy analysis- A case study of MediaTek
Date Issued
2016
Date
2016
Author(s)
Chen, Yu-Min
Abstract
As the mergers and acquisition values hit a record high in 2015, which is 17% percent higher than the previous peak in 2007. However worldwide semiconductor revenue decreased 1.9 percent in 2014 revenue and entered a phase of slow growth. Facing the fierce competition and shrinking profit, semiconductor companies have found it must evolve and go for horizontal integration to increase the economy of scales and strength technology innovation. In 2015, the key highlight would be Dell''s buying EMC for $67 billion in October 2015 the biggest tech deal ever. Followed by Avago Technologies absorbed Broadcom and Western Digital bought SanDisk. Definitely the semiconductor industry is entering the consolidation era. In this study, we analyzed the Taiwanese fabless IC design industry and took Mediatek as a case to discuss their global strategy through horizontal integration. Followed the global wave, MediaTek has also acquired Alpha Imaging Technology, Chingis Technology, Ilitek and Richtek Technology through its subsidiaries in a strategic way. The most representative example in Mediatek M&A history would be the acquisition of MStar in 2012 enabled MediaTek to strengthen their competitiveness in smartphone and TV market, enhance technology level and increase business scale to compete in this global competition. In the long run, an interesting finding Mediatek chose to invest more during recessions and seek the momentum for the next wave technology. With all the ingredients ready, how to leverage the existing mobile strength, get global partnership with eco-system provider Google and strategically work with biggest retailer like Amazon in US and Alibaba in China would be the key milestones in the near future.
Subjects
mergers and acquisitions
global strategy
Mediatek
Type
thesis