Semiconductor Stocks: Which Are Likely Acquisition Targets

Wall Street analysts see mergers and acquisitions continuing in the semiconductor sector as the industry matures. Two research firms on Wednesday picked their top M&A targets among semiconductor stocks.




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Susquehanna Financial Group analyst Christopher Rolland identified three semiconductor stocks as acquisition targets based on their strategic and financial value.

His top three candidates for takeouts in the year ahead are Knowles (KN), Semtech (SMTC) and Cirrus Logic (CRUS).

“After a robust decade of M&A in which industry consolidation averaged 10% to 15% per annum, the rate has slowed to about 8% in 2020 and just 4% in 2021 year to date,” Rolland said in a note to clients. “Stretched valuations and increased regulatory concerns may have deterred interest. However, consolidation is alive and well.”

Semiconductor Stocks In Play

He rates Knowles stock and Semtech stock as neutral and Cirrus Logic stock as positive.

Rolland called Knowles his “top takeout candidate” among semiconductor stocks. The Itasca, Ill.-based company is the dominant global player in microphone MEMs, or microelectromechanical systems. Knowles has adjacencies in capacitors and other precision components.

Semtech is his No. 2 pick. The Camarillo, Calif.-based company is best known for making LoRa chips. LoRa, short for “long range,” is a low-power wireless technology for Internet of Things applications.

Austin, Texas-based Cirrus Logic, his No. 3 pick, makes audio chips.

Elsewhere on Wall Street Wednesday, KeyBanc Capital Markets identified five possible acquisition targets among semiconductor stocks. They include Ambarella (AMBA), Lattice Semiconductor (LSCC), Marvell Technology (MRVL), Silicon Laboratories (SLAB) and Synaptics (SYNA).

“We anticipate competitive pressures will continue to fuel consolidation as companies look to compete on scale,” KeyBanc analyst John Vinh said in a note to clients.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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