China’s Semiconductor Industry Sees Surge in M&A Activity
Domestic Consolidation Heats Up
In recent months, China’s semiconductor sector has witnessed a surge in mergers and acquisitions (M&A). Since mid-March, A-listed companies including Primarius Technologies (华大九天), NAURA Technology Group (北方华创), Yangjie Technology (扬杰科技), Zhenshi Holding Group (至正股份), Sino Microelectronics (新相微), and Hua Hong Semiconductor (华海诚科) have announced M&A deals or progress, spanning multiple segments of the semiconductor supply chain. From early 2025 to late March, 56 A-share firms disclosed semiconductor-related M&A plans, according to incomplete statistics.
Is the Long-Awaited M&A Spring Here?
Domestic assets are increasingly attractive, with buyers showing stronger acquisition intent than ever before, notes ICwise (芯谋研究), a leading third-party semiconductor research firm. This shift reflects the industry’s maturation, moving beyond past skepticism toward domestic players. However, ICwise cautions that while M&A discussions are rising, successful closures remain limited in the first half of 2025. High-profile terminated deals—such as Goodix Technology (汇顶科技) abandoning its bid for Cloudminds (云英谷) and Ingenic Semiconductor (英集芯) halting its acquisition of Fremont Micro Devices (辉芒微)—highlight ongoing challenges.
Policy Tailwinds Drive Consolidation
A flurry of supportive policies, including the 2024 “State Nine Guidelines” (新国九条), “Tech 16 Measures” (科技十六条), and the “M&A Six Provisions” (并购六条), has catalyzed activity. Since September 2024, 744 M&A deals involving A-share companies have been disclosed, with 81 classified as major restructurings, per Wind data. Semiconductor M&A accounted for 43 deals in 2024, while 20 transactions have already emerged in Q1 2025 alone—nearly half of last year’s total.
Notable Deals
NAURA Technology Group (北方华创) acquired a 9.49% stake in Sino-Microelectronics (芯源微), a lithography equipment specialist, for ¥1.687 billion, aiming for majority control.
Primarius Technologies (华大九天) announced plans to acquire Xpeedic Technology (芯和半导体), a niche EDA “little giant” specializing in RF and high-speed simulation.
Industry Perspectives
“China’s semiconductor sector has moved from rapid growth to consolidation,” says Zhang Guobin, founder of EETrend (电子创新网). “Policy guidance and market realities—shrinking investments, tightened IPOs, and weak demand—are pushing firms to unite for survival.”
Exit Pressures Fuel Activity
With fundraising challenges post-2022 and a sharp decline in semiconductor IPOs (only 6 listings in H1 2024), M&A has become a critical exit path, explains Zhao Zhanxiang, partner at Cloudview Capital (云岫资本). “Deals now prioritize industrial synergy, small-to-mid-sized targets, and differentiated pricing,” he adds.
Key Trends
Vertical Integration: Companies like Shanghai Simgui Technology (沪硅产业) are acquiring subsidiaries to consolidate control over 300mm silicon wafer assets.
Material & Packaging Focus: Firms such as Tongfu Microelectronics (通富微电) and JCET Group (长电科技) are targeting gaps in advanced packaging and materials.
Challenges Ahead
Despite momentum, hurdles persist. Failed deals often stem from valuation disputes and misaligned shareholder interests, particularly among state-backed entities. ICwise emphasizes the need for professional M&A capabilities, akin to Western giants: “Chinese firms must build in-house expertise or partner with advisors to navigate complex valuations and IP due diligence.”
Strategic Imperatives
Enhance M&A Expertise: Develop dedicated teams or engage specialists to handle financial, legal, and technical complexities.
Accept Market Realities: With AI diverting capital from semiconductors, sellers must act pragmatically to maximize value.
Reform State-Asset Stewardship: Accelerate M&A to preserve state-owned capital, as aging assets and buyer-market dynamics erode value.
Conclusion
“China’s semiconductor industry is at a tipping point,” ICwise concludes. “Market and policy signals are clear: consolidation is inevitable. Hesitation will only lead to forced concessions. The time for M&A is now.”
