Programmable logic chip maker LATTICE SEMICONDUCTOR Corp. is reportedly working with investment banks to investigate the possibility of selling the company‘s business; meanwhile, according to Reuters, the news has already caused Interest in a potential Chinese buyer.
According to anonymous sources, Lattice is working with Morgan Stanley to carefully evaluate potential buyers, including the concerns of a Chinese industry. The report pointed out that the person who asked not to be named said that it is not yet possible to determine whether Lattice agrees with any transaction.
Chinese companies and venture capital (VC) funds have recently bid for US high-tech companies, especially chip companies. The Chinese government announced last year that it will invest US$161 billion in the next 10 years and plans to actively support the development of the domestic semiconductor industry.
However, in recent weeks, two major transactions that have caught the attention of US technology companies and China have failed under the scrutiny of the US Foreign Investment Committee (CFIUS). First, last week, when CFIUS announced plans to review, China Unisplendour abandoned its plan to acquire about 15% of Western Digial Corp. (WD) for $3.8 billion. In mid-February, FAIRCHILD declined the offer of China Resources Microelectronics Ltd. and Hua Capital Management Co. Ltd., which clearly stated that CFIUS will block this A Chinese acquisition transaction.
CFIUS is an inter-departmental agency of the US federal government that has the power to review transactions that may expose US companies to foreign-controlled risks. As China continues to launch overseas mergers and acquisitions, CFIUS is becoming the first line of defense for US national security. According to CFIUS’s recently released annual report, Chinese companies are the focus of recent US foreign M&A transactions: In the 147 transactions completed in 2014, China accounted for 24, four times as many as in 2010, and consecutively Three years ahead of the rest of the world; the number of Chinese-funded titles reviewed in 2012-2014 reached 68, a record high.
The semiconductor industry is in an unprecedented wave of consolidation. According to IC Insights, the market research company, in 2015 alone, the value of M&A transactions announced by the semiconductor industry exceeded $105 billion, which is eight times higher than the average annual M&A transaction value of semiconductor companies in the past five years.
Lattice is the second largest supplier of programmable logic components in addition to ALTERA, which Altera has acquired by Intel last year. The company has not yet commented on this report.