After NXP announced the acquisition of Marvell's Wi-Fi and Bluetooth chip portfolio business for $2019.5 in cash at the end of May 17, the semiconductor industry ushered in another acquisition drama - on June 6, German semiconductor manufacturer Infineon announced the acquisition of US semiconductor manufacturer Cypress (Cypress) for $6.3 per share in cash. The acquisition cost Cypress €28 billion ($35.90 billion).

Cypress Semiconductor manufactures high-performance ICs for data transmission, telecommunications, PCs and military systems. Founded in 1982, the company is a large international company. At present, there are about 3000,<> employees, and a sales network has been established around the world. The company is headquartered in San Jose, California, USA.

Founded on April 1999, 4 in Munich, Germany, Infineon Technologies is one of the world's leading semiconductor companies. Its predecessor was the semiconductor division of the Siemens Group, which became independent in 1 and went public in 1999. Its Chinese name was Yiheng Technology, which was renamed Infineon Technologies after 2000.

Infineon Technologies AG, headquartered in Neubiberg, Germany, provides semiconductor and system solutions for the three major technological challenges of modern society – energy efficiency, mobility and security.

Infineon and Cypress acquired the drama

Founded on April 1999, 4 in Munich, Germany, Infineon Technologies is one of the world's leading semiconductor companies. Its predecessor was the semiconductor division of the Siemens Group, which became independent in 1 and went public in 1999. Currently, Infineon's main business areas include semiconductor and system solutions for automotive and industrial power devices, chip cards and security applications. According to Infineon's financial report, in fiscal 2000, Infineon generated sales of 2018.76 billion euros.

At the same time, Cypress is also well known, its Chinese name is Cypress, the company was founded in 1982 and headquartered in San Jose, California, USA, providing advanced embedded solutions for the world's most innovative automotive, industrial, smart home appliances, consumer electronics and medical products; At the same time, Cypress' microcontrollers, wireless and USB connectivity solutions, analog ICs, and reliable and high-performance flash memory help engineers design differentiated products and use them in the market.

Commenting on the acquisition, Reinhard Ploss, CEO of Infineon, said:

The planned acquisition of Cypress is a milestone step in Infineon's strategic development. We will strengthen and increase the speed of our earnings growth and expand our business to a broader level. With this transaction, we will be able to offer our customers the most comprehensive product portfolio, bridging the physical and digital worlds and unlocking new growth potential in the automotive, industrial and IoT sectors." The deal will also make the company's business model more resilient. We welcome our colleagues at Cypress to Infineon as part of our ongoing commitment to innovation and focus on R&D to accelerate technological advancement."

For Cypress, according to Hassane El-Khoury, President and CEO of Cypress, the Cypress team is excited to join forces with Infineon to identify the multi-billion dollar opportunities arising from the massive increase in connectivity and computing demand in the next wave of technology. The combination will provide more secure and seamless connectivity, as well as more complete hardware and software solutions and products, enhancing customers' products and technologies to better serve their end markets; In addition, the two companies' businesses are a good match and will bring more and better opportunities for customers and employees.

Of course, Steve Albrecht, chairman of the board of directors of Cypress, is also very satisfied with the purchase price, he said that the company has received the acquisition intention of a number of companies, but finally chose Infineon, and the cash price of 23.85 per share also allows shareholders to get a return; The acquisition will also create increasingly critical product opportunities in the highly competitive automotive, industrial and consumer markets.

In the consideration of this acquisition, there is a 2019% premium to Plath's volume-weighted average share price for 4 days from April 15 to May 5, 28, which can be said to be a big profit.

What does this acquisition mean for Infineon?

Obviously, for Infineon, this acquisition means a lot.

On the business side, Infineon said that after the acquisition of Cypress, Infineon will strengthen the core of driving structural growth and apply the company's technology to a wider range of areas, which will accelerate the strengthening of the company's foundation for earnings growth in recent years.

Specifically, Cypress has a differentiated portfolio of microcontrollers, software and connectivity components that complement Infineon's power semiconductors, sensors and security solutions. Combining their technology assets will enable more comprehensive and advanced solutions for high-growth applications such as electric motors, battery-powered devices and power supplies.

At the same time, Infineon's security expertise combined with Cypress' connectivity technology will enable the company to accelerate its entry into new IoT applications in the industrial and consumer markets. In automotive semiconductors, the expanded combination of microcontrollers and NOR flash memory will offer great potential, especially in advanced driver assistance systems and new electronic architectures for automobiles.

It can be seen that Infineon's acquisition of Cypress is based on the latter's advantages in the Internet of Things, automotive and other fields.

Of course, with the acquisition of Cypress, Infineon's market can also be expanded. Infineon said that through Cypress' strong R&D capabilities and presence in the US market, Infineon will not only strengthen its services and products for key local customers in North America, but also enhance its capabilities in other important regions. The company will acquire R&D units in Silicon Valley and expand its presence and market share in Japan, a strategic key market.

At the same time, Infineon wants to make its business model more resilient by achieving significant economies of scale. Based on pro forma revenue of €2018 billion in fiscal 100, the transaction will make Infineon the eighth largest chip manufacturer in the world. Building on the world's leading power semiconductors and safety controllers, Infineon will become a chip supplier for the automotive electronics market.

In addition, on a financial level, the acquisition will enhance Infineon's financial strength, and Infineon's shareholders are expected to benefit from the earnings growth achieved in the first full fiscal year after closing. Expected economies of scale are expected to generate cost synergies of €2022 million per year by 1. The complementary product portfolio will provide additional chip solutions with potential long-term revenue synergies expected to exceed €8.15 billion per year.