An article written by Alex Web for Bloomberg – A pile of semiconductor cash sitting on the sidelines will be watching this deal to gauge the regulatory winds.
In the context of the semiconductor industry’s $200 billion run of deals over five years, Nvidia Corp.’s $6.9 billion acquisition of Israel’s Mellanox Technologies Ltd. might appear insubstantial.
Its significance is in fact disproportionately large. Chipmakers the world over will closely follow the takeover of the data center equipment specialist for any indication that regulators, particularly in China, are again willing to approve semiconductor transactions. Intel Corp. is likely to cast a keener eye than most.
The industry’s acquisitions spree came to a grinding halt in 2018 after China failed to approve Qualcomm Inc.’s planned $44 billion purchase of NXP Semiconductors NV. The demurral had little to do with substantive antitrust concerns, and a lot to do with U.S. trade tensions.
That transaction bears similarities to Nvidia and Mellanox because in both cases the target does not, on the whole, compete with the buyer. NXP would have given Qualcomm greater exposure to the industrial and automotive businesses, and access to NXP’s strong customer relationships in those industries to sell its own products… Full article