- HIGH-K
- Posts
- M&A Frenzy
M&A Frenzy
Semiconductor Weekly - Business | Investing | Technology
Hello weekend! Despite a slow start in venture funding for semiconductor startups, big M&A news has been coming in back-to-back. Let's dive in
💸Softbank loves UK semiconductors
🦾AMD is on the hunt for….. everything
SoftBank Supercharges AI Ambitions with Graphcore Buyout
(image credit: Graphcore)
Softbank for the rescue! British AI chip startup Graphcore has been acquired by Japanese technology giant SoftBank Group.
The financial terms of the deal were not officially disclosed, but industry insiders suggest the acquisition value is around $400 million.
This acquisition represents a significant markdown from Graphcore's last valuation of $2.8 billion following its previous funding rounds, which collectively raised close to $700 million.
Graphcore, founded in 2016 and headquartered in Bristol, UK, is known for its development of the Intelligence Processing Unit (IPU), a data center AI accelerator chip, and its accompanying software stack, Poplar.
CEO Nigel Toon claimed that, despite its innovative products and a strong team, Graphcore's financial constraints limited its market reach and competitiveness.
Graphcore operates in a highly competitive field, facing challenges from established tech giants and other AI hardware startups. It only booked the revenue of $2.7 million in FY2022.
SoftBank's acquisition of Graphcore aligns with its broader strategy to dominate the AI and semiconductor sectors.
Recently, SoftBank's founder Masayoshi Son announced plans to raise $100 billion for a new AI chip venture.
SoftBank aims to integrate Graphcore into this grand vision, leveraging its advanced IPU technology to drive forward AI innovation..
The acquisition brings substantial financial resources that will enable Graphcore to scale its operations, enhance its product offerings, and compete more effectively on a global scale.
The company plans to continue supporting its existing IPU customers while also developing next-generation products.
Graphcore co-founders Nigel Toon and Simon Knowles will maintain their leadership roles, at least for a while.
AMD Expands AI Horizon with Silo AI Acquisition
(image credit: Silo AI)
AMD acquires language model developer Silo AI for $665M.
The transaction is all-cash deal and is expected to close later this year
Silo AI will be integrated into AMD's Artificial Intelligence Group developing AMD's MI300 machine learning accelerator series, which competes directly with Nvidia Corp.'s market-leading graphics cards.
Founded in 2017 and headquartered in Helsinki, Finland, Silo AI is a leading AI development and deployment services provider.
Silo AI specializes in helping enterprises identify business tasks that can be automated with AI and develops custom language models to perform these tasks.
The company boasts over 200 completed AI projects for major enterprises like Allianz, Nokia and Siemens.
This is AMD’s 3rd (announced) acquisition since 2023.
AMD previously acquired Nod.ai, the developer of SHARK, an open-source AI tool designed to accelerate inference performance, promising up to three times better speed than tools like TensorFlow
By integrating Silo AI into its operations, AMD plans to leverage Silo AI's software portfolio and its 300-person machine learning team.
This team will focus on developing more open-source LLMs like Viking and Poro.
“Silo AI’s team of trusted AI experts and proven experience developing leadership AI models and solutions, including state-of-the-art LLMs built on AMD platforms, will further accelerate our AI strategy and advance the build-out and rapid implementation of AI solutions for our global customers."
🚀 Funding & Deal
Planqc, a Munich-based quantum computing startup, has raised €50 million in a Series A round led by Speedinvest, with participation from UVC Partners, High-Tech Gründerfonds, and Bayern Kapital. (Link)
iVP Semi, a Chennai-based fabless semiconductor startup, has secured $5 million in Pre-Series A funding to expand testing services and operations in India. (Link)
MaterialGate, a Japanese advanced materials startup, has received an investment from Real Tech Japan.
🧿 Industry on the Move
AI server orders increased in Q1 and Q2 2024 and are expected to rise further with the launch of NVIDIA’s Blackwell GB200 servers and WoA AI-powered notebooks in Q3. (TrendForce).
IC manufacturing equipment sales are projected to grow significantly by 2025, reflecting the industry's expansion and increased production capabilities. (DigiTimes)
Japanese market analysts see global chip stocks in a bubble, reflecting concerns about potential overvaluation amidst rapid growth and high investor expectations. (Nikkei Asia)
TSMC reported a 32.9% increase in revenues for June 2024 compared to the same month last year, with Q2 revenue reaching T$673.51 billion ($20.67 billion), exceeding analyst expectations. (MarketWatch)
Samsung plans to use 2nm chip production technology for Japan's AI unicorn, which marks a significant step in its semiconductor advancements, although the company faces challenges in AI competition. (Nikkei Asia)
IVP Semiconductor aims to achieve revenues of USD 70-100 million in the next 3-4 years as it scales operations and expands its market presence. (Economic Times)
Photronics reported strong Q1 earnings, showcasing robust performance in the photomask market, which is crucial for semiconductor manufacturing. (Yahoo Finance)
🧭 Chip Launchpad
Oxford Ionics has set new global quantum performance records, breaking through significant barriers in quantum computing capabilities. (Oxford Ionics)
Applied Materials introduced engineered copper wiring featuring a 33% reduction in the thickness of the liner to 2nm and 25% less line resistance, with enhanced low-k dielectric material for improved structural integrity in 3D stacks. (VentureBeat)
Onto Innovation is launching a glass substrate suite of equipment, including the JetStep X500 panel-level packaging lithography system and the Firefly G3 sub-micron automatic metrology and inspection system for panel-level packaging and advanced IC substrates. (Onto).
Intel is preparing to launch its next-generation Arc ‘Battlemage’ products for desktop computers. (Tom’s Hardware)
JEDEC is finalizing the HBM4 standard, which will double the number of channels per stack compared to HBM3. (JEDEC)
✈️ Across the Globe
🌎 North America
The U.S. Department of Commerce announced plans to fund new R&D activities with up to $1.6 billion to boost domestic advanced packaging capacity through the National Advanced Packaging Manufacturing Program (NAPMP). (Bloomberg)
Colorado Springs' semiconductor facility, Entegris, will receive $75 million in CHIPS Act funds to support its operations. (CPR)
ISE Labs opened its second U.S. test facility in San Jose, California, focusing on qualification and reliability processes. (GVWire)
ISED (Innovation, Science, and Economic Development Canada) announced a CAD $120 million investment in FABrIC, managed by CMC Microsystems. (AZCommerce)
The Dominican Republic is positioning itself as a new destination for the semiconductor industry, aiming to attract investment and enhance its technological capabilities. (WATE)
🌏 Asia
Sony and other Japanese chipmakers plan to invest $30 billion in expanding production capacity to stay competitive in the global semiconductor market. (Nikkei Asia)
India's Ministry of Electronics and Information Technology (MeitY) Secretary stated that India is poised to lead the global semiconductor industry with its talent and expertise. (India TV News)
🌏 Europe & EMEA
🗼 In-Depth & Insights
“Innovation programs for raw materials may involve implementing new production technologies that can cut raw material use, or finding viable substitutes to replace high-risk raw materials with more sustainable alternatives for which sourcing risks are lower.”
“AI is really the start of the next ‘S’ curve for this industry. It has the potential to have a lot of legs because it changes how we interact with a lot of devices. It’s the next killer app.”
“We understand that revenue is not the only important element in a company valuation, but it is incredibly important for semiconductor companies to have revenue growth. Without revenue growth, it is difficult to make meaningful gains in free cashflow which is more important in valuations.”
🎙️ Echo Chamber
“The world used to be a happy place for material suppliers, relying on intricate global supply chains for uninterrupted lines of critical materials. But now, the call to action is to start thinking about a more regional model.” - Bertland Loy, CEO of Entegris
“The US semiconductor industry needs to adopt new technologies, particularly AI, to stay competitive. AI can improve factory efficiency, reduce costs, and enable edge computing.” - Tom Caufield, CEO of GlobalFoundaries
📈 Chart of the Week
Taiwan Semiconductor Manufacturing Company, or TSMC, ADR shares on the New York Stock Exchange briefly crossed the $1 trillion valuation mark on July 8th after gaining as much as 4.8%. The stock is up nearly 80% this year to date.
