Taiwanese firms are cautiously optimistic about mergers and acquisitions (M&As) over the next five years to expand their operations and economic scale, unfazed by the economic slowdown and interest rate hikes, PricewaterhouseCoopers (PwC) Taiwan said yesterday, citing a survey.
Eighty-one percent of respondents said they would be more active in M&As, higher than 71 percent last year, PwC M&A and real estate head Jason Liu (劉博文) told a forum in Taipei.
Firms expect M&A prices to remain flat or decline, suggesting they are expecting price corrections, Liu said.
Photo: Reuters
Suppliers of electronic components were the most popular M&A targets at 39 percent, followed by biotechnology and medicine companies at 29 percent and semiconductor firms at 28 percent, the survey found.
The findings make sense given that there has been a 45 percent increase in output from Taiwanese electronics companies over the past five years, Liu said.
That explains why fingerprint sensor supplier Egis Technology Inc (神盾) last year acquired a 23 percent stake in CMOS chip designer Silicon Optronics Inc (晶相光) to increase its access to the auto market and security monitor controls, it said.
At the same time, the healthcare and precision medicine industries have huge business potential because the world’s population is aging, Liu said.
It is not surprising that semiconductor firms are also gaining attention as M&A targets, as the industry’s output last year spiked 18.5 percent to US$162.3 billion, he said.
The attitude of companies toward M&A deals is changing, as they are being used as a tool to secure business alliances and replace competition with collaborative partners, Liu said.
A majority of respondents, 56 percent, said that they favored the alliance approach, when tapping business in fields in which they do not know enough about the business models, supply chains and customers, he said, adding that 82 percent preferred owning stakes of more than 20 percent.
Eighty-six percent of the respondents said that they would like to keep M&A deals below US$100 million to achieve the best business scale and synergy benefit, Liu said.
Forty-three percent said they would consider divestment options to ease financial burdens and channel resources into areas with growth potential, he said, adding that portfolio adjustments, shuttering non-core businesses and strategy changes were the main reasons given for divestment decisions.
Southeast Asia, the US and Japan topped the list of M&A destinations, as local firms are increasingly shifting attention away from China, Liu added.
Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday said it has signed a memorandum of understanding (MOU) with Polar Semiconductor LLC to collaborate on the production of 8-inch wafers in the US. The collaboration aims to strengthen 8-inch wafer manufacturing in the US amid Washington’s efforts to increase onshore manufacturing of semiconductors, contribute to supply chain resilience against shifting geopolitical dynamics, and ensure a secure domestic supply of power semiconductors critical to automotive, electric grids, robotic manufacturing and data centers, the companies said in a joint statement. Under the MOU, Polar and UMC will identify devices for Polar to manufacture at
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
TARIFF TALKS: The US secretary of commerce is eyeing more than US$300 billion in investments and said Taiwan would train US workers, but Taipei has denied the latter US Secretary of Commerce Howard Lutnick said the US is expecting a large investment pledge from Taiwan in trade talks, while President William Lai (賴清德) listed areas that need improvement in order for projects to be completed. “We’re in the midst of discussions,” Lutnick said on Wednesday. “But the fact is, this administration’s goal is to bring semiconductor manufacturing to America.” Lai on Wednesday said Taiwan is supportive of US President Donald Trump’s goal of reindustrializing the US, including efforts to ramp up semiconductor production. Such a goal would require the US to reduce its reliance on Taiwan as a key source
RSS