China’s growth in the semiconductor industry. Cross-border M&A as strategic priority

Abstract

This dissertation aims to present the reasons why China has become in the last years one of the most relevant investors in the semiconductor industry at a global level. The analysis is conducted taking into account the variations in this extremely important and changing emerging market and that will probably drive China to overcome the USA in its leading position. The flow of Chinese mergers and acquisitions (M&A) that involved Europe and the USA in the recent years is strictly related to the semiconductors industry, since M&A are relevant strategic investments for the growth in this sector. The investigation, therefore, is carried out through three parts which are useful to understand causes and effects brought by these investments and to forecast the future trends and involvements. The analysis will start from an overview on the global semiconductor market, describing its history, features and segmentation, and will be further conducted focusing on China’s role in the semiconductor industry. In particular, will be examined the policies as well as the strategies undertook by the government to support the industry, including the M&A. In the last chapter the focus will be on a case study: the acquisition of the Italian semiconductor company LFoundry, by the Chinese leading company in semiconductor SMIC. The analysis of the case study serves as a model to show how an acquisition made of win-win cooperation between a Chinese and an Italian company can be a successful strategy of growth in the semiconductor industry.