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Monday, 25 June 2012 10:53

MediaTek buys Mstar

Written by Nick Farrell



Writes a cheque for $3.8 billion


Taiwan’s largest chip designer MediaTek has written a $3.8 billion cheque for its smaller rival MStar Semiconductor.

According to Focus Taiwan the move might mean some short term pain for MediaTek but in the long term it makes sense. MediaTek and MStar, both make chips used in televisions and mobile phones.  The deal is the fifth-largest semiconductor acquisition in the past decade, according to data compiled by Bloomberg.

Analysts working for Deutsche Bank wrote to its customers that the deal will boost the companies’ competitiveness and increase bargaining power with suppliers. Jessica Chang said that industry consolidation between these two leading fabless companies will ease competition especially for mid- to high-end product segments and thus is good for margins of the both.

Merging the two companies creates the world’s fourth-largest chip designer behind Qualcomm, Broadcom, and AMD. Aaron Jeng, a Taipei-based analyst at Nomura, wrote the combined company would control 80 percent of the global market for chips used in TVs.

Nick Farrell

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