PC Hardware-Related Companies Buy Out Season
on July 24, 2006 - 10:00 AM
I think all PC hardware-related companies are for sale these days. In almost 20 years in the business Iíve never seen so many merger and acquisitions involving big players at the same time. That is the life of a high-competitive industry with very small profit margins. Here is a small retrospect of what happened recently.
- AMD bought ATI today, in a transaction valued at USD 5.4 billion. This is probably the most important change in the PC hardware industry in the last years. What will happen on the CPU and VGA market is still subject of a lot of speculation.
- Macrosynergy: This XGI-related company was bought by ATI this month. Weíve seen some headlines saying that ATI has bought XGI, but this is not totally accurate. What ATI has bought was Macrosynergy in Shanghai plus related personnel working out of XGI's Santa Clara, California location. ATIís idea behind this acquisition is to increase its presence in mainland China plus getting some extra research and development people to join them.
- ULi: This chipset maker was bought by NVIDIA on February 2006. It was originally part of ALi until they decided to put all their chipset products under a new company. This acquisition should help NVIDIA to improve their chipsets.
- ABIT: This motherboard manufacturer is struggling since the Taiwan Stock Exchange found out that their results were manipulated. By the end of 2005 they had already migrated half of their production to ECS manufacturing. In January 2006 Taiwanese PC maker USI announced their proposal to buy ABIT, depending yet of approval from Taiwan Stock Exchange and the involved parties. USIís proposal was to pay around USD 10.5 million for ABIT plus 20 million of shares of the new company USI would open to hold ABIT, a real bargain, since it includes all ABIT trademarks and manufacturing facilities. However, rumor says that ABITís president was recently arrested for manipulating ABITís financial statements (we couldnít confirm or deny this story) and maybe the Taiwan Stock Exchange wonít approve this acquisition.
- ECS: Tatung merged with ECS in January 2006. By the agreement, Tatung is now the largest ECS shareholder, with 30% of the available stocks. As payment, Tatung gave ECS their desktop PC segment, which had USD 60 million in cash, USD 136 million in inventory and USD 2 million in fixed assets at the moment of the merger. This was an interesting deal, since both companies were healthy.
- Maxtor: Seagate announced that they will buy Maxtor in December 2005, in a USD 1.9 billion transaction. Just to remember that Maxtor had bought Quantum in 2000 paying USD 1.3 billion for it.
- Chaintech: BTC bought part of Chaintech and then Walton Advanced Engineering bought 25% of Chaintech in September 2005, changing the company name to Walton Chaintech, aparently leaving the motherboard business and probably entering the memory business. Around the same time Chaintech USA started to share BTCís building in Fremont, CA in order to cut expenses, and as far as we know just one employee from Chaintech USA is still on the company.
There is also a rumor dated back 2003 that Gigabyte and MSI would merge, which regained some strenght last month after DigiTimes published a piece called "Industry makers concerned about potential Gigabyte and MSI consolidation".
If there is any other merger or acquisition missing on this list, please let us know.
The big question now is: which company in the PC hardware industry will be the next one to be sold? Any guesses?
Originally at http://www.hardwaresecrets.com/blog/PC-Hardware-Related-Companies-Buy-Out-Season/38
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