Infineon to buy Cypress Semiconductor for $10 billion

04 June 2019

Chalk up yet another major acquisition in the semiconductor market in 2019 as Infineon Technologies AG will acquire Cypress Semiconductor Corp. for $10 billion.

By adding Cypress to its portfolio, Infineon can expand to a broader range of applications and use its library of microcontrollers and connectivity components in a combined offering with electric drives, battery-powered devices and power supplies. These semiconductors will also accelerate Infineon’s entry into new internet of things (IoT) applications in the industrial and consumer space as well as expand into advanced driver assistance systems and electronic architectures in vehicles.

Under terms of the agreement, Infineon will offer $23.85 in cash for all outstanding shares of Cypress, which represents a 46% premium to Cypress’ recent average price. The acquisition is subject to approval by Cypress shareholders and regulatory bodies. The deal is expected to close by the end of 2019 or early 2020.

After the deal’s completion, Infineon will add to its R&D presence in Silicon Valley and gain presence and market share in the Japanese market. As a result of the transaction, Infineon will become the number eight chip manufacturer in the world.

This transaction is just another in a series of major acquisitions that have happened in 2019. A key to the acquisition trend happening in 2019 is the forecast that the semiconductor industry will decline in revenues this year by 7.2%. One of the biggest acquisitions so far this year was Nvidia’s purchase of intelligent interconnect device and service maker Mellanox for $6.9 billion. However, many other smaller acquisitions have been happening, including Xilinx's purchase of Solarflare, Intel's purchase of FPGA maker Omnitek, Dialog’s purchase of Silicon Motion Technology and Taoglas’ acquisition of Think Wireless, an antenna maker for wireless systems inside vehicles. Marvell has also gotten in on the act with its acquisition of Avera and having its Wi-Fi business acquired by NXP most recently for $1.76 billion.

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