A New Breed Drives the Deal-Making Frenzy at Computer Chip Firms
- 6 years ago
A New Breed Drives the Deal-Making Frenzy at Computer Chip Firms
SANTA CLARA, Calif. — Matthew Murphy, a first-time chief executive, was barely a year into a turnaround effort at Marvell Semiconductor
when he sold its board on a bold move: a $6 billion offer to purchase Cavium, another midsize maker of computer chips.
While acquisitions in the industry are not new, the slowing sales of many kinds of chips
and the stiff costs to develop new ones have led these executives to pursue bigger deals and curtail spending on technology projects that might take years to pay off.
“They’re still fighting the past battles of the industry.”
Another chief executive who has wrung profits from purchased companies is Steve Sanghi, who leads Microchip Technology in Chandler, Ariz.
At Micrel, another Silicon Valley company that Microchip purchased, for $839 million
in 2015, the margin improved to more than 30 percent from 6 percent, he said.
SANTA CLARA, Calif. — Matthew Murphy, a first-time chief executive, was barely a year into a turnaround effort at Marvell Semiconductor
when he sold its board on a bold move: a $6 billion offer to purchase Cavium, another midsize maker of computer chips.
While acquisitions in the industry are not new, the slowing sales of many kinds of chips
and the stiff costs to develop new ones have led these executives to pursue bigger deals and curtail spending on technology projects that might take years to pay off.
“They’re still fighting the past battles of the industry.”
Another chief executive who has wrung profits from purchased companies is Steve Sanghi, who leads Microchip Technology in Chandler, Ariz.
At Micrel, another Silicon Valley company that Microchip purchased, for $839 million
in 2015, the margin improved to more than 30 percent from 6 percent, he said.