Mergers and acquisitions, become the next domestic start-up chip companies have to face the choice.

The best era of chip financing has passed, has nothing to do with market recovery, has nothing to do with industrial policy, because the market cannot accommodate so many low-end repetitive chip companies.

The biggest impact on the industry is that the peak of the withdrawal of investment in the semiconductor industry has arrived. Frantic investment began in 2019, and concentrated withdrawal will begin in 2024. In previous years, there were exits and takeovers. Now, a lot of people are quitting, but it's hard to find a replacement.

M&a and listing are the best ways to solve the withdrawal of equity investment.

The threshold for the listing of chip companies is increasing, and there are rumors that if it is not the chip companies and high-end chip companies that solve the problem of the neck, those middle and low-end repeated unprofitable chip companies will have no chance to go public. If this rumor is true, it is a very correct and favorable signal for China's semiconductor industry and helps to establish a healthy and orderly Chinese semiconductor industry.

Then, for equity investment exit, listing exit this road is more difficult. The market and investors will push domestic startup chip companies to merge or be acquired.

Not all domestic startup chip companies have the opportunity to be acquired. It can be analyzed from two levels of product line and chip company (chip design company) :

First, which product lines of chip design companies are most likely to be acquired

1, analog chip

Analog chip product line is very long, the market application is very wide. Startups are only part of the analog chip circuit, a large number of listed companies have been listed, and it is difficult for later entrants to re-enter. There is no amount of subdivided track, it is difficult to support a listed company. Those analog chip startups that do a good job are worth acquiring.

2. MCU Corporation

Many people feel that the MCU track is a long slope and thick snow, because the MCU is widely used and highly differentiated. However, the MCU market is also a fragmented market, a large number of subdivisions have been occupied by a number of listed companies, other subdivisions to make a lot of sales is very difficult, coupled with the market price to the cost or below the cost, so that MCU companies can no longer invest in more subdivisions.

At this time, MCU companies through mergers and acquisitions to reduce operating costs and strengthen supply chain negotiation capabilities, it becomes very valuable.

Second, which chip design companies are most likely to be acquired

1, chip technology and products to subdivide the top three track

Chip technology and products to subdivide the top three track, proving that the company's R & D team is excellent and reliable. Chip design companies to succeed, the technology and products are only the premise, can get a good supply chain price, can not enter the target customer, these are challenges and barriers. Once acquired, there is an opportunity to solve the latter two problems.

2, chip products have entered the industry large customers

Some chip products themselves do not have any technical content and threshold, but the industry's large customer threshold is very high, through mergers and acquisitions can establish a large customer relationship, become a qualified supplier, and help other product lines to import large customers.

The market downturn, capital winter, domestic start-up chip company founders into the anxiety period. Some chip company founders like to talk to me often, and I am also happy to exchange ideas and learn from each other.

My suggestion is that the merger of domestic start-up chip companies should be sooner rather than later. The later, the fewer opportunities for mergers and acquisitions, the lower the value, because there are indeed too many start-up domestic chip companies.

Someone asked me, is Sanwu Micro considering mergers and acquisitions? Sanwu Micro is considering mergers and acquisitions, but currently does not accept mergers and acquisitions.

It's not a contradiction, it's a three-wuwei with its own reasons. In the WiFi FEM circuit, Kangxi successfully listed as the first WiFi FEM company, followed by Sanwu Micro, the momentum is full, and has the opportunity to become the second chip listed company in the WiFi FEM circuit. There is a more important reason is that a few years ago I shouted to become the first chip listed company in Jinjiang, Fujian. A lot of people think I'm a slogan, but it's actually a responsibility and a dream. A lot of people didn't believe it before, but now a lot of people are starting to believe it. I must work for this goal until the end.

For domestic start-up chip company mergers and acquisitions, I talk about a few points of view.

1, do not subdivide the top three track, the value and significance of the merger is not much.

2, those fictitious sales or negative gross profit sales, there is no merger value.

3, the merger of two unprofitable chip companies, the final result is likely to be unprofitable.

4, mergers and acquisitions must pursue value empowerment, rather than drawing pie financing together. Financing through mergers and acquisitions, it doesn't work.

5, the object of mergers and acquisitions is best listed companies, followed by a merger listing.