© IHS Markt Components | June 06, 2019
Infineon becomes world’s top automotive chip supplier
Infineon’s planned USD 10 billion acquisition of Cypress Semiconductor will catapult it - past current market leader NXP - to become the world’s largest automotive chip supplier.
It also gives the German firm a stronger position in the critical markets for infotainment and advanced driver assist systems (ADAS), writes IHS Markit in a statement. In 2018, Infineon ranked second in the global automotive chip business, with USD 4.2 billion in revenue and a 9.9 percent share of the global market. U.S.-based Cypress ranked 14th, with total automotive revenue of USD 808 million and a market share of 1.9 percent. The combined companies would have a market share of 11.9 percent and revenue of USD 4.9 billion in automotive semiconductors. This exceeds NXP’s 10.8 percent share and USD 4.5 billion in revenue for 2018. Beyond boosting Infineon’s market share, Cypress’ product portfolio expands the company’s offerings into new areas it currently doesn’t serve. “Cypress’s memory capabilities and products represent a major enhancement to Infineon’s automotive portfolio,” said Phil Amsrud, senior principal analyst, Automotive Semiconductors at IHS Markit. “Infineon currently has no memory revenue in automotive, so Cypress’ flash and SRAM product lines are completely additive to its product line and capabilities. Moreover, Cypress’ NOR flash products align well with Infineon’s strategy and reputation for offering products that make systems safe and secure.” The addition of flash memory and SRAM products will particularly augment Infineon’s advanced driver assistance systems (ADAS) capabilities. With the acquisition of Cypress, Infineon will also expand its ADAS offerings and become more relevant to the Infotainment segment. Infineon in 2018, ranked eighth in the market for chips serving ADAS and infotainment applications, while Cypress held sixth place. The merging of the companies’ revenue would put Infineon in fourth place with revenue of $1.2 billion, usurping Japan’s Renesas.
COVID-19 highlights the gravity of the secondary market for SME Cha Jin-Seok, Chief Financial Officer of SK Hynix, said it best in the company’s Q1 earnings call, “Because of a never experienced pandemic, even basic business activities such as maintaining normal operations and predicting future demand have become challenging tasks.”
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