Various Semiconductor (ON Semiconductor) has announced it had completed acquisition of quick Semiconductor (Fairchild Semiconductor); That a $2.4 billion deal, can make various further expansion power semiconductor market landscape, especially the power transistor and diode.

The merger was recently the agitation and one of the most recent case of IC industry, indicates the widespread view across the industry, now is the semiconductor business is "big business" just have advantages, can faster development technology, and has the ability to mass production, and can grow up in has been think both slow on the market the key to winning.

IC industry of the whole and the wind has for several years, mainly is encouraged by low price of capital, and because of billions of dollars worth of manufacturers often buy another billions of dollars worth of manufacturers (such as Avago $37 billion bid for Broadcom, and SoftBank $32 billion bid for ARM), everyone is accustomed to this kind of deal.

On Semi acquisition Fairchild's case is focus On the benefits and value of power management IC suppliers; Renesas (Renesas) acquisition of Intersil ($3.2 billion), and the DE bono semiconductor (ADI) hit a $14.8 billion takeover of LingLiEr (Linear Technology), are based on the similar considerations.

Microcontroller (MCU) and processor manufacturers also has a strong interest in modeling and power/power technology, for example, bought Micrel Microchip, as well as the acquisition of chow technology (Richtek) Mediatek (Mediatek); These vendors for advanced MCU through acquisition or processor components add power management technology.

For a 14 nm process to build it contains 5 billion transistor component of the processor makers, go to other places to find power supply solution to customers is not so good (Qualcomm because can provide their own Snapdragon processor with power management IC, and created another billions of dollars of business opportunities).

To seek hegemony in the field of power semiconductor, depends on the power management components (e.g., voltage stabilizer) and power transistor technology. According to market research firm IHS Markit statistics, Infineon, Infineon is discrete semiconductor components (power transistor, diode, etc.) sales, world market share reached 21% in 2015 (before the merger, Fairchild in discrete power semiconductor components world market share of 5.7%, 3.3% ON Semi).

After the acquisition of Fairchild ON Semi market is expected to be in power semiconductor components after Infineon's second largest suppliers

A merger with the Fairchild will deepen and balance ON power management components of Semi product lineup; According to ON Semi President and chief executive officer Keith Jackson, ON Semi product is rich in low power semiconductor components, Fairchild products are focused ON high power applications. But he also said that although the two companies of discrete components are very strong, the product little overlap.

New ON Semi target market, the future, the company already has many application fields of gains, including contribution to its 2015 revenue 33% of cars application (such as MOSFET power system drive components, vehicle camera and security system required components, etc.), and 2015 revenue contribution to 24% of industrial application products (including motor drive IC, transistors, etc.), and contribute 18% to 2015 revenue related components of communication.

ON Semi operation related products account for only 12% of revenue in 2015 ─ ─ it's a bit strange, because the company is still needed for desktop and laptop PC power supply components (such as Vcore voltage regulator) of lead supplier; Responsible for the ON Semi enterprise strategy and marketing vice President David Somo said, is the underlying cause of revenue decline in market the overall PC market downturn.

But ON Semi also expected that with the use of Intel (Intel) Skylake series processor PC, new listing, could be applied in PC market recently has a new round of revenue growth. ON Semi Vcore voltage regulator is ten years ago from ADI acquisitions, high-performance technology allows the company dominated the PC power market; The company also provide power MOSFET, authorized the Fairchild technology DrMOS series products for ON Semi in the server application market.

After the merger Fairchild, ON Semi plans to organize reorganization, the business is divided into three "SoluTIons Group (SoluTIons Group, SG), respectively, the power supply solution (PSG), special application simulation solution (ASG), and video SoluTIons (ISG); PSG including power switch components, signal adjusting circuit, protection diode, voltage reference component.

In addition ASG include support for automotive, industrial, communications, medical and military aerospace and other special applications in the field of simulation products, ISG, including CMOS/CCD image sensor, near detector (proximity detectors), and support for automotive, medical, aerospace applications such as video signal processor (image signal processor).

To one of the key to success in power semiconductor market, decrease when the switch power supply is the dynamic wear (dynamic losses) technical ability (i.e., improve energy transfer efficiency); By matching the switching speed of DC - DC converter and the MOSFET drive by power transistor switching speed.

This has nothing to do with lower conduction resistance (RDSON), because the lower conduction resistance will increase transistor gate capacitance, making them more difficult to drive; In addition MOSFET can become dull in high current loads. In a press conference, ON Semi Jackson pointed out that the 650 V gallium nitride (GaN) components, as well as 1200 V of silicon carbide (SiC) components, will be the new company's future development project.

As the simulation and power semiconductor market growth slows, manufacturers are expected to expand sales and improve profits; But smart phones, tablets and laptop application is no longer a revenue growth driver, because of the mobile phone operators including China Huawei, Huawei, ZTE (ZTE), are seeking ways to reduce costs and profits of compressing the relevant power component suppliers.

Industry control and Internet of things (IoT) is a new growth engine, this type of application to the demand of the simulation component and the traditional is different, into one of the most popular transistor IGBT or bipolar (bipolar juncTIon) components, and it is with 480 vac electrical appliances motor to control the power cord, often up to 600 v or 650 v. ON Semi thinks, because the company can provide the essential components of this kind of demand, growth will outperform the overall simulation/power semiconductor market.

But the current analog IC and discrete components only single-digit growth rate only 2% (2015), On Semi will boost profits? To this, the company said in the first year after the two companies merge to achieve cost savings of $225 million, from wood cutting (especially the business and administrative department) and 8 inch wafer plant capacity utilisation of ascension, estimated gross margin can be up to 40 ~ 45%; And Jackson says the highest margin products come from medical and communications applications market, next for the automotive and consumer markets.