Transferred from: Yicai

Related-party transactions account for one-third of the total, analog chip materials have become a hot spot, and semiconductor mergers and acquisitions will continue to be hot in 2024

On December 24, Huahai Qingke (688120.SH) announced that it plans to acquire the remaining shares of Xinyu Semiconductor, and after the transaction is completed, Xinyu Semiconductor will become a wholly-owned subsidiary. According to the announcement, Xinyu Semiconductor will be in a state of loss in the short term, and after the acquisition is completed, Huahai Qingke will also increase R&D investment to achieve continuous iterative upgrading of ion implantation equipment and new product development.

Since April, policies such as "Nine Articles", "Eight Policies on the Science and Technology Innovation Board" and "Six Policies for Mergers and Acquisitions" have been promulgated one after another, and the A-share market has not only ushered in a bull market, but also provided new opportunities for mergers and acquisitions between companies. After that, Shanghai and Shenzhen have announced action plans to support mergers and acquisitions from 2025 to 2027, and a curtain on mergers and acquisitions of listed companies has slowly opened.

As a high-tech industry supported by key policies, semiconductors ushered in a "merger and acquisition fever" in the second half of the year. According to the Wind database and the reporter's incomplete combing, since the beginning of this year, a total of 30 semiconductor mergers and acquisitions have been announced for the first time, of which more than half of the events were first disclosed after September 20, that is, after the announcement of the "920" new policy.

Analog chips and materials have become hot areas for mergers and acquisitions

Among the 31 semiconductor mergers and acquisitions, semiconductor materials and analog chips were the most, with a total of 14 cases, accounting for nearly half.

Among the semiconductor mergers and acquisitions disclosed for the first time this year, 7 mergers and acquisitions came from the field of analog chips, including Kai Wei (688693.SH), Xi Di Micro (688173.SH), Jingfeng Mingyuan (688368.SH), NOVOSENSE (688052.SH), etc.

On October 22, Jingfeng Mingyuan announced the acquisition of control of Sichuan Yichong through private placement. Jingfeng Mingyuan and Sichuan Yichong both focus on the layout of power management chips. It mentioned in the merger plan that the company has strong business synergies with Sichuan Yichong, which can enrich its mobile phone and automotive product lines, while generating complementary advantages in customers and supply chains.

Including the above-mentioned mergers and acquisitions, analog chip mergers and acquisitions are all from power management, signal chain or power IC, the specific mergers and acquisitions are as follows: macro micro technology acquisition of 100% equity of Changzhou Mianchuang Electronics, NOVOSENSE 1 billion yuan wholly-owned acquisition of Mai Geen, Kai Wei special capital increase of Zhongxiang Technology to obtain 51% equity, Jinghua micro acquisition of part of the equity of Zhixin Micro, Xidi Micro successively acquired Zinitix and Chengxin micro equity.

Since the beginning of this year, 7 semiconductor material companies have initiated mergers and acquisitions, of which 3 are upstream silicon wafer manufacturers, which are Lion Micro (605358.SH), TCL Zhonghuan (002129.SZ), and Youyan Silicon (688432.SH). 2 companies provide raw materials for semiconductor manufacturing equipment, which are Zhongjuxin (688549.SH) and Aisen (688720.SH). The other two are companies that provide raw materials for semiconductor packaging, but their merger and acquisition targets are the same: Huawei Electronics initially approached Debang Technology (688035.SH) for mergers and acquisitions, and turned to Huahai Chengke (688535.SH) after the failure, and Huahai Chengke is currently acquiring 70% of the shares of Huawei Electronics is in progress.

Four companies from pharmaceutical, chemical, commercial and precious metals have also attracted widespread attention for cross-border mergers and acquisitions of semiconductor assets: Shuangcheng Pharmaceutical (002693.SZ) acquired 100% of the equity of Ola Shares, Baiao Chemical (603360.SH) increased its capital and obtained 46.6667% of its shares, Youa Shares (002277.SZ) acquired 100% of the shares of Shenzhen Shangyangtong, and Pioneer Technology acquired Wanye Enterprise (600641.SH) to gain control.

In March this year, two mergers and acquisitions of Changdian Technology (600584.SH), a leading domestic packaging and testing company, attracted much attention, and shortly after Changdian Technology announced the acquisition of 80% of the shares of Shengdi Semiconductor for 4.5 billion yuan, Changdian Technology's own control also changed, and China Resources Group acquired control of Changdian Technology for 11.7 billion yuan.

In contrast, there were not many mergers and acquisitions in the field of digital circuits, only 2, and the acquirers were GigaDevice (603986.SH) and Yuntian Lifei (88343.SH). Among them, GigaDevice and its joint investors acquired 70% of the shares of Suzhou Saixin for 580 million yuan.

Yu Yiran, executive director of CIC Insight Consulting, believes that most of the core businesses of target companies are concentrated in the middle and upper reaches of the semiconductor industry, and there are problems such as fierce competition and scattered layout. Yu Yiran believes that "mergers and acquisitions will help target enterprises to better finance and achieve resource sharing, further integrate industrial chain technology, and help target enterprises expand their original markets and enhance their brand influence." ”

There are many related-party transactions

According to incomplete statistics from the Wind database and reporters, one-third of these mergers and acquisitions involve related party transactions. This includes the acquisition of 100% equity of Shangyangtong by Youa Shares, the acquisition of 70% equity of Suzhou Saixin by GigaDevice, the acquisition of control of Sichuan Yichong by Jingfeng Mingyuan, and the acquisition of 100% equity by Shuangcheng Pharmaceutical Co., Ltd. of Ola Shares.

According to the combing, some of these related-party transactions are mainly reflected in the relationship between the positions or equity of the two parties to the transaction. For example, in the merger and acquisition of Ningbo Ola by Shuangcheng Pharmaceutical, the actual controller of Shuangcheng Pharmaceutical was also the actual controller of the counterparties Ola Investment and Ningbo Shuangquan, and this transaction was an integration under the same actual controller. For another example, in the acquisition of Fullerhua, the chairman of Fuller also served as the executive partner of the three institutions of Fullerhuake, Fuller Huachuang and Fuller Huaji.

There are also listed companies and joint investors who are related. One of GigaDevice's directors and one supervisor are senior executives of its co-investor, Stony Brook Capital, and the two companies jointly initiated the merger with other institutions, which makes the acquisition of Suzhou Saixin a connected transaction. After the completion of the transaction, GigaDevice and the joint investors acquired control of Suzhou Saixin through voting rights entrustment, concerted action agreement and other agreements.

In other cases, there was no related party relationship before the transaction, but after the transaction is completed, the counterparty of the listed company accounts for more than 5% of the total share capital of the listed company, which constitutes a connected transaction. Before Jingfeng Mingyuan acquired Sichuan Yichong, the two companies had no related relationship, but after the completion of the merger and acquisition transaction, Pan Siming, the actual controller of Sichuan Yichong, owned more than 5% of the shares of Jingfeng Mingyuan; In the case of the private placement acquisition of Shenzhen Shangyangtong by Youa Shares, the two companies were not related to each other before the completion of the transaction, and if the transaction is completed, Jiang Rong, the actual controller of Shenzhen Shangyangtong, and his concerted actors will hold more than 5% of the shares of Youa Shares.

The reporter found that for the purpose of related party transactions, many of the above-mentioned companies mentioned that they can complement each other's advantages with the existing product lines of listed companies, generate business synergy, and jointly develop the market. Some companies also said that the purpose of the transaction is to inject high-quality assets into listed companies, enhance the ability of listed companies to continue operations, and promote the transformation and upgrading of listed companies to the semiconductor field.

Compared with related party transactions, M&A transactions involving major restructuring are fewer, accounting for less than one-third. According to the reporter's combing, Youa shares merger and acquisition of Shangyangtong, Huahai Chengke mergers and acquisitions of Huawei Electronics, Xidi micro mergers and acquisitions of Chengxin Micro, Jingfeng Mingyuan mergers and acquisitions of Sichuan Yichong, Fuld mergers and acquisitions of Fuller Hua, Shuangcheng Pharmaceutical mergers and acquisitions of Ola shares, Fuller mergers and acquisitions of Hangzhou Zhixin, and Zhizheng shares acquisition of AAMI, all of which have reached the standards of major asset restructuring.

4 M&A targets have sprinted for IPO, and 7 M&A have been overseas

From the perspective of M&A targets, 4 have tried to sprint to IPO. According to the reporter's observation, these four companies are all Fabless chip design companies.

Shenzhen Shangyangtong, the target of the merger and acquisition of Youa shares, is a chip design enterprise mainly engaged in power semiconductors. Since its establishment in 2014, Shenzhen Shangyangtong has completed a total of 5 rounds of financing, and it completed the Pre-IPO round of financing in 2022 to prepare for the listing. In 2023, its IPO on the STAR Market was accepted by the Shanghai Stock Exchange, but two months later, its IPO process was halted.

Suzhou Saixin is the target of GigaDevice's M&A, and it has also completed multiple rounds of equity financing, and obtained one round of pre-IPO financing of more than 200 million yuan in 2022. In the same year, its IPO application was accepted by the Shanghai Stock Exchange, and its IPO process was terminated in March of the following year.

The IPOs of the other two companies have not yet been accepted by the Shanghai Stock Exchange, but it was revealed that they had been in a state of listing counseling. Goodix's target Yunyinggu has started IPO counseling in early 2023, but there has been no follow-up since then. Ola also announced its entry into listing counseling in 2022, and then abandoned its IPO plan.

In addition, it is worth mentioning that there are 7 cross-border mergers and acquisitions, of which 4 are in the field of semiconductor materials: TCL Zhonghuan acquired SPML100% equity, GRYAN Silicon acquired 70% equity of DGT, Zhongjuxin acquired 100% equity of Heraeus Conamic UK Limited, and Aisen acquired INOFINE80% equity.

The reporter got a glimpse from these data that after the promulgation of the new policy, semiconductor mergers and acquisitions did accelerate, and to make the domestic semiconductor industry bigger and stronger, mergers and acquisitions may be a necessary way.

Yu Yiran told reporters that China's semiconductor industry is at the opportunity of policy dividends, the M&A environment is relatively favorable, and the semiconductor industry is a typical capital-intensive industry, which needs a lot of funds to support R&D and marketing. At present, semiconductor mergers and acquisitions can make full use of policy advantages, integrate industry resources, and achieve diversified business upgrades. Another industry insider told reporters that the semiconductor merger and acquisition fever will not subside in a few years, compared with the previous two years, slowing down the speed of listing, encouraging mergers and acquisitions, will become a major trend.