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Semiconductor industry spending on research and development grew by just 0.5% in 2015, which was the smallest increase since the 2009 downturn year and significantly below the compound annual growth rate (CAGR) of 4.0% in R&D expenditures during the last 10 years, according to IC Insights’ new 2016 edition of The McClean Report.  The half-percent increase nudged worldwide R&D spending by semiconductor companies to a new record-high level of $56.4 billion in 2015 from the previous peak of $54.1 billion set in 2014, says IC Insights’ flagship market analysis and forecast report on the IC industry.

Growing concerns about the weak global economy, slumping sales in the second half of the year, and unprecedented industry consolidation through a huge wave of merger and acquisition agreements weighed on semiconductor R&D spending in 2015.  The new 2016 McClean Report shows Intel continuing to lead all semiconductor companies in R&D spending in 2015, accounting for 22% of the industry’s total research and development expenditures.  The top 10 R&D ranking is shown in Figure 1.

Following Intel in the 2015 R&D ranking are Qualcomm, Samsung, Broadcom, and the world’s largest wafer foundry, TSMC.  The top five spenders were unchanged from 2014, but below that point, the rankings of most companies were shuffled.  Micron Technology moved up to sixth in 2015, swapping positions with Toshiba, which fell to seventh in the new ranking.  MediaTek went from ninth in 2014 to eighth place, while SK Hynix climbed from 12th to ninth in 2015.  ST slid from eighth in 2014 to 10th in 2015, and Nvidia fell out of the top 10 to 11th place in 2015.

The top 10 in the R&D ranking collectively increased spending on research and development in 2015 by about 2% compared to the half-percent increase for total semiconductor R&D expenditures in the year.  Combined R&D spending by the top 10 exceeded total expenditures by the rest of the semiconductor companies (about $30.8 billion versus $25.6 billion) in 2015—something that has continued to hold true since 2005 and probably well before that, according to The 2016 McClean Report, which becomes available in January 2016.

Figure 1

Figure 1

Additional details on semiconductor R&D spending and other technology trends within the IC industry are provided within the IC industry are provided in The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry (released in January 2016).

The mobile sector is driving production and market growth; however a new market driver, IoT is on the horizon and is expected to have a significant impact on the advanced packaging industry.

“IoT driven semiconductor industry consolidation, is reflecting into a highly dynamic advanced packaging landscape,” commented Andrej Ivankovic, Technology & Market Analyst, Advanced Packaging & Semiconductor Manufacturing at Yole Développement.

And he added: “Numerous packaging options developed by the industry leaders, are being explored as new IoT applications arise.”

In parallel, Yole Développement’ analysts highlight the noteworthy demand for advanced packaging solutions and the increasing number of shipped wafers: focus is turning to integration and wafer level packages to enable a functionality driven roadmap and revive the cost/performance curve.

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Yole Développement (Yole), the “More than Moore” market research and strategy consulting reinforces its market positioning within the advanced packaging area with the release of its first report “Status of the Advanced Packaging Industry”. This first edition brings a thorough analysis including dynamics and disruptions of the market, market forecasts per packaging platform and device type from 2014 to 2020, market shares…This analysis also presents a detailed analysis of the advanced packaging supply chain, financial evolutions and mergers & acquisitions. Yole’s advanced packaging team proposes a packaging technology segmentation and highlights with this new analysis, the impact of Internet of Things and the adoption of 2.5D/3D, Fan-Out and Fan-In solutions.

“A transformation of the semiconductor industry is under way,” said Andrej Ivankovic, Yole. “Advanced packaging is part of the scaling and functionality roadmaps.”

The latest events in the technology market indicate that 2015 marks the beginning of an exciting new era for the IT and electronics industry. At semiconductor supply chain level, the industry entered a profound consolidation phase with high M&A activity reshaping the business landscape. FEOL device scaling and related cost reduction are deviating from the path they followed for the past few decades, with Moore’s law in its foundation. Advanced nodes do not bring the desired cost benefit anymore and R&D investments in new lithography solutions and devices below 10nm nodes are rising substantially.

As the smartphone market matures, new forces are appearing in the form of IoT. While the mobile sector continues to drive the market, the scent of IoT is already spreading in the consumer sector with products such as wearables and first smart home appliances. IoT market, application and technology segmentation has begun. Companies across the industry are restructuring, merging and acquiring in order to adjust their portfolio, enable a complete platform offer and establish leading positions on the market.

Yole’s advanced packaging analysts also identified other market dynamics. They announced:
•   The foundry involvement is no longer a dent in advanced packaging production.
•   Increased activity of Chinese capital on the market.
•   And more

At the level of technology, as profitability of FEOL scaling options remains uncertain and IoT promises application diversification, the spotlight is now turning to advanced packages for cost reduction, performance boost and functional integration.

In order to answer market demands, the advanced packaging segment focuses on integration and WLP. Emerging packages such as Fan-Out WLP, 2.5D/3D IC and related System-in-Package solutions aim to bridge the gap and revive the cost/performance curve.

How will the advanced packaging industry evolve, which changes in the semiconductor supply chain are taking place and which packaging technologies will be most critical in the years to come? Yole proposes with this new technology and market analysis, a deep understanding of the advanced packaging technical and market challenges. Under this new report, the market research and strategy consulting company brings a thorough analysis of the advanced packaging industry and its future development covering platforms Fan-Out WLP, Fan-In WLP, Flip Chip and 2.5D / 3D.

Worldwide semiconductor revenue totaled $333.7 billion in 2015, a 1.9 percent decrease from 2014 revenue of $340.3 billion, according to preliminary results by Gartner, Inc. The top 25 semiconductor vendors’ combined revenue increased 0.2 percent, which was more than the overall industry’s growth. The top 25 vendors accounted for 73.2 percent of total market revenue, up from 71.7 percent in 2014.

“Weakened demand for key electronic equipment, the continuing impact of the strong dollar in some regions and elevated inventory are to blame for the decline in the market in 2015,” said Sergis Mushell, research director at Gartner. “In contrast to 2014, which saw revenue growth in all key device categories, 2015 saw mixed performance with optoelectronics, nonoptical sensors, analog and ASIC all reporting revenue growth while the rest of the market saw declines. Strongest growth was from the ASIC segment with growth of 2.4 percent due to demand from Apple, followed by analog and nonoptical sensors with 1.9 percent and 1.6 percent growth, respectively. Memory, the most volatile segment of the semiconductor industry, saw revenue decline by 0.6 percent, with DRAM experiencing negative growth and NAND flash experiencing growth.”

Intel recorded a 1.2 percent revenue decline, due to falls in PC shipments (see Table 1). However, it retained the No. 1 market share position for the 24th year in a row with 15.5 percent market share. Samsung’s memory business helped drive growth of 11.8 percent in 2015, and the company maintained the No. 2 spot with 11.6 percent market share.

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2015 (Millions of Dollars)

Rank 2014

Rank 2015

Vendor

2014 Revenue 

2015 Estimated Revenue 

2014-2015 Growth (%)

2015 Market Share (%)

1

1

Intel

52,331

51,709

-1.2

15.5

2

2

Samsung Electronics

34,742

38,855

11.8

11.6

5

3

SK Hynix

15,997

16,494

3.1

4.9

3

4

Qualcomm

19,291

15,936

-17.4

4.8

4

5

Micron Technology

16,278

14,448

-11.2

4.3

6

6

Texas Instruments

11,538

11,533

0.0

3.5

7

7

Toshiba

10,665

9,622

-9.8

2.9

8

8

Broadcom

8,428

8,419

-0.1

2.5

9

9

STMicroelectronics

7,376

6,890

-6.6

2.1

12

10

Infineon Technologies

5,693

6,630

16.5

2.0

Others

157,992

153,182

-3.0

41.2

Total

340,331

333,718

-1.9

100

Source: Gartner (January 2016)

“The rise of the U.S. dollar against a number of different currencies significantly impacted the total semiconductor market in 2015,” said Mr. Mushell. “End equipment demand was weakened in regions where the local currency depreciated against the dollar. For example in the eurozone, the sales prices of mobile phones or PCs increased in local currency, as many of the components are priced in U.S. dollars. This resulted in buyers either delaying purchases or buying cheaper substitute products, resulting in lower semiconductor sales. Additionally, Gartner’s semiconductor revenue statistics are based on U.S. dollars; thus, sharp depreciation of the Japanese yen shrinks the revenue and the market share of the Japanese semiconductor vendors when measured in U.S. dollars.”

The NAND market continued to deteriorate throughout the year. As a result, revenue grew only 4.1 percent in 2015, fueled by elevated supply bit growth that resulted in an aggressive pricing environment. The tumultuous NAND pricing environment rippled through most of the NAND solutions, particularly solid-state drives (SSDs), which continue to encroach on hard-disk drives (HDDs). The ensuing price war in SSDs further pressured the profitability of the NAND flash makers amid the biggest technology transition in flash history — 3D NAND. While 3D NAND commercialization was modest, it was limited to only one vendor — Samsung. Modest revenue gains have not stopped investment in NAND flash and 3D technology, with all vendors continuing to spend aggressively in the technology and most with new fabs.

After 32.0 percent revenue growth in 2014, the DRAM market hit a downturn in 2015. An oversupply in the commodity portion of the market caused by weak PC demand led to severe declines in average selling prices (ASPs), and revenue contracted by 2.4 percent compared with 2014. The oversupply and the extent of ASP declines could have been significantly worse if Micron Technologies’ bit growth had performed in line with its South Korean rivals. Fortunately for the market, the company saw negative bit growth due to its transition to 20 nm, sparing the industry from an even more severe downturn.

Additional information is provided in the Gartner report “Market Share Analysis: Semiconductors, Worldwide, Preliminary 2015 Estimates.”

LG is showcasing a handful of futuristic concepts at CES 2016 this week, including an 18 inch prototype of an OLED display that can roll up like a newspaper.

Source: LG

Source: LG

The display has a high-definition resolution of 1200×810 with almost one million mega-pixels and can be rolled up to a radius of 3cm without affecting the function.

OLED screens are composed of LEDs that emit their own light from the lit pixels, conversely to older LCD technology which relies on a backlight to illuminate the display. Many phones such as those produced by Samsung already use OLED panels, but they have so far been entirely inflexible.

LG’s new technology paves the way for smaller electronic devices that can bend – like phones – but LG claims it can be scaled up to the size of a 50 inch television.

The company said the new screens were mounted on a “high molecular substance-based polyimide film” that served as the back plate for the rollable panel. The polyimide film reduces the thickness of the panel which helps to “significantly improve” its flexibility.

The screen is currently just a prototype and can only be rolled up in one direction. It is also quite delicate and can be damaged easily resulting in dead pixels appearing on the display.

LG Display’s KJ Kim said that in the future consumers will be able to roll up their television sets when not in use, although he gave no release date for the new technology.

The display was shown at the Consumer Electronics Show (CES) in Las Vegas along with a number of other exhibitors such as Samsung who have demonstrated a smart fridge and a television that can act as a wireless hub for the Internet of Things.

Gary Shapiro, one of the organizers of CES, said: “We are in the middle of a revolutionary wave of innovation where game-changing ideas are springing up from small companies and entrepreneurs all over the world.”

By Shannon Davis, Web Editor 

2015 was a year of unprecedented consolidation in the semiconductor industry, as well as a technological crossroads in Moore’s Law. Below is a round-up, based on reader popularity, of the most read stories on Solid State Technology from 2015.

1) 2015 outlook: Tech trends and drivers

Leading industry experts provided their perspectives on what to expect in 2015. 3D devices and 3D integration, rising process complexity and “big data” are among the hot topics.

2) Reframing the Roadmap: ITRS 2.0

The International Technology Roadmap for Semiconductor (ITRS) is being reframed to focus more on end applications, such as smartphones and micro-servers. Labeled ITRS 2.0, the new roadmap is a departure from a strong focus maintaining the path defined by Moore’s Law.

3) Freescale and NXP agree to $40B merger

Chipmaker NXP Semiconductors NV announced that it has agreed to buy Freescale Semiconductor Ltd for $11.8 billion and merge business operations. The combined enterprise values at just over $40 billion and will create a new leader in the auto and industrial semiconductor markets.

4) Samsung’s FinFETs are in the Galaxy S6!

The much-anticipated Samsung Galaxy S6 made an early appearance in Chipworks’ teardown labs last week, thanks to the diligent skills of their trusted logistics guru.

5) Moore’s Law to keep on 28nm

Scaling is now bifurcating – some scaling on with 28/22nm, while other push below 14nm.

6) More change for the chip industry

As if scaling to 7nm geometries and going vertical with FinFETs, TSVs and other emerging technologies wasn’t challenge enough, the emerging market for connected smart devices will bring more changes to the semiconductor sector. And then there’s 3D printing looming in the wings.

7) EUV: Unlike anything else in the fab

Imagine EUV lithography in high volume production. ASML has been working for years to make it happen. Earlier this year, ASML said that one of its major chip-manufacturing customers has placed an order for 15 EUV systems, including two that are set to be delivered before the end of this year. ASML did not name the customer, but it is almost certainly Intel (according to research firm IHS).

8) Apple Watch and ASE start new era in SiP

Back in April the Apple watch appeared in the Chipworks’ labs, and of course they pulled it apart to see its contents.

9) New AMS fab going to Marcy, NY

Austria-based ams AG, formerly known as Austriamicrosystem, announced plans to locate a new 360,000 ft2 fab in upstate New York at the Nano Utica site in Marcy, NY. The fab will be used to manufacture analog devices on 200/300mm wafers.

10) Historic era of consolidation for chipmakers

We are in a historic era for consolidation among semiconductor manufacturers. Solid State Technology compiled the latest consolidation news, as well as analysis on the implications for the industry.

11) Lithography alternatives: Why are they essential?

The availability of patterning alternatives in the lithography landscape represents a big opportunity to properly address the coming needs generated by the IoT.

12) A look ahead at IEDM 2015

In the second week of December, the good and the great of the electron device world made their usual pilgrimage to Washington D.C. for the 2015 IEEE International Electron Devices Meeting.

Bonus: Top Webcasts of 2015 – Available On Demand Now!  

How the IoT is Driving Semiconductor Technology

The age of the Internet of Things is upon us, with the expectation that tens of billions of devices will be connected to the Internet by 2020. This explosion of devices will make our lives simpler, yet create an array of new challenges and opportunities in the semiconductor industry. At the sensor level, very small, inexpensive, low power devices will be gathering data and communicating with one another and the “cloud.” On the other hand, this will mean huge amounts of small, often unstructured data (such as video) will be rippling through the network and the infrastructure. The need to convert that data into “information” will require a massive investment in data centers and leading edge semiconductor technology. 

Sensor Fusion and the Role of MEMS in the IoT

MEMS have quite different process and material requirements compared to mainstream microprocessor and memory types of devices. This webcast will explore the latest trends in MEMS devices – including sensor fusion and the important role that MEMS will play in the Internet of Things (IoT). Marcellino Gemelli, Head of Business Development at Bosch Sensortec will discuss how smart systems are enabled through sensor fusion. Karen Lightman, Executive Director of MEMS Industry Group (MIG), provided a “debrief” from the recent MEMS Technical Congress and a preview of a SEMICON West workshop focused on back-end challenges.

3D NAND Challenges and Opportunities

Flash memory has revolutionized the world of solid-state data storage, mainly because of the advent of NAND technology. However, from the technical point of view, this requires a major change in how these memories are being fabricated. This presentation discusses this (r)evolution as well as its major scaling limitations.

Resolve to stay up-to-date on industry news in 2016! Here’s how.

SEMI projects that worldwide sales of new semiconductor manufacturing equipment will decrease 0.6 percent to $37.3 billion in 2015, according to the SEMI Year-end Forecast, released today at the annual SEMICON Japan exposition.  In 2016, nominal positive growth is expected, resulting in a global market increase of 1.4 percent.

The SEMI Year-end Forecast predicts that wafer processing equipment, the largest product segment by dollar value, is anticipated to increase 0.7 percent in 2015 to total $29.5 billion. The “Other Front End” category (fab facilities, mask/reticle, and wafer manufacturing equipment) is expected to increase 20.6 percent in 2015. The forecast predicts that the market for assembly and packaging equipment will decrease by 16.4 percent to $2.6 billion in 2015 and that the market for semiconductor test equipment is forecast to decrease by 7.4 percent, totaling $3.3 billion this year.

For 2015, Taiwan, South Korea, North America, remain the largest spending regions, with investments in Japan approaching North American levels.  SEMI forecasts that in 2016, equipment sales in Europe will climb to $3.4 billion (63.1 percent increase over 2015). After a 13 percent contraction for Europe in 2015, GLOBALFOUNDRIES, Infineon, Intel, and STMicroelectronics are all expected to significantly accelerate fab equipment spending in 2016, resulting in strong growth in the region in 2016.  In Rest of World, essentially Southeast Asia, sales will reach $2.5 billion (25.7 percent increase), the China market will total $5.3 billion (9.1 percent increase), and North America equipment spending will reach $5.9 billion (6.1 percent increase). The equipment markets in Japan, Korea, and Taiwan are expected to contract in 2016.

The following results are given in terms of market size in billions of U.S. dollars:

Year_End_image_600px

The Equipment Market Data Subscription (EMDS) from SEMI provides comprehensive market data for the global semiconductor equipment market. A subscription includes three reports: the monthly SEMI Book-to-Bill Report, which offers an early perspective of the trends in the equipment market; the monthly Worldwide Semiconductor Equipment Market Statistics (SEMS), a detailed report of semiconductor equipment bookings and billings for seven regions and over 22 market segments; and the SEMI Year-end Forecast, which provides an outlook for the semiconductor equipment market.

NXP Semiconductors N.V. and Freescale Semiconductor, Ltd. announced the completion of the merger pursuant to the terms of the previously announced merger agreement from March 2015. The merger has created a high performance mixed signal semiconductor industry leader, with combined revenue of over $10 billion. The merged entity will continue operations as NXP Semiconductors N.V. and has become the market leader in automotive semiconductor solutions and in general purpose microcontroller (MCU) products.

“Through this merger we have created an industry powerhouse focused on the high growth opportunities in the Smarter World, capitalizing on the emerging opportunities offered by the accelerating demand for connectivity, processing and security. Today’s formation of the new NXP is a transformative step on our journey to become the industry leader in high performance mixed signal solutions,” said Rick Clemmer, NXP Chief Executive Officer. “This merger enables us to deliver more complete solutions to our customers as we are emerging as the leader in the Secure Connections – and the supporting infrastructure – for the Smarter World domain. As a result, we reiterate today that we fully expect to continue to significantly out-grow the overall market, drive world-class profitability and generate even more cash, allowing us to continue creating significant value for NXP’s shareholders.”

As previously announced, the transaction is expected to be accretive to NXP non-GAAP earnings in 2016, and NXP anticipates achieving cost savings of $200 million in 2016 with a clear path to $500 million of annual cost synergies.

NXP also today announced the closing of the divestiture of its RF Power business to Jianguang Asset Management Co. Ltd (“JAC Capital”), after receiving official confirmation that JAC Capital has deposited the required funds at its bank in China to pay the purchase price. The cash proceeds for the sale will be received later this month following the required regulatory filings for cross-border transfers of funds from China. NXP has obtained bridge financing until the funds are received.

Related news: 

NXP-Freescale merger to result in world’s eighth largest chip maker

Freescale and NXP agree to $40 Billion merger

Historic era of consolidation for chip makers

Imec, the nano electronics research center and Coventor, a supplier of semiconductor process development tools, today announced the expansion of a joint development project to explore process variation issues in 7nm semiconductor technology.

For over a year, the joint team has been using Coventor’s semiconductor process modeling platform, SEMulator3D, to perform predictive modeling of semiconductor fabrication processes and to proactively analyze process variation issues in 7nm semiconductor technology.  The collaboration has now been expanded beyond logic-only devices to include 3D NAND Flash, STT-MRAM, and other device types.

“Leveraging Coventor’s technical expertise and its SEMulator3D platform has enabled us to solve real-world semiconductor integration and processing problems at the 7nm node,” said An Steegen, senior vice president of process technology at imec.   “Our joint collaboration is helping the entire semiconductor industry lower the risks associated with moving to the latest process technologies by providing customers with proven, tested process development platforms and advancing the availability, yield and cost of next-generation semiconductor technology.”

A highlight of the collaboration has been a massive process simulation experiment to explore the effect of process variability in 7nm BEOL (back end of line) fabrication processes.   Researchers used SEMulator3D to simulate an entire window of process variability, which would have required more than one million actual semiconductor wafers if conventional testing methods were used. This experiment was made possible by the robust virtual fabrication environment of SEMulator3D using a fully codified 7nm process flow, along with the ability to support parallel distributed computing and a novel algorithm for submitting variation cases to the simulator.  With these powerful tools, the team was able to produce key findings that will help advance 7nm semiconductor technology.

“We have worked with imec to accelerate the state of the art in semiconductor process technology useful in a broad range of next-generation devices such as Logic, 3D NAND Flash, STT-MRAM, and others,” said David Fried, Chief Technical Officer at Coventor. “By providing our customers with a comprehensive virtual fabrication environment, plus our combined expertise, Coventor and imec are reducing the time and cost associated with moving to these emerging semiconductor nodes.”

IC Insights will release its new 2016 McClean Report late next month.  The 2016 McClean Report will include a ranking of the top-50 semiconductor suppliers’ for 2015 as well as the top-50 fabless semiconductor suppliers.  The forecasted “post-merger” top-10 2015 IDM and fabless semiconductor suppliers are covered in this research bulletin.

Unlike the relatively close annual market growth relationship between fabless semiconductor suppliers and foundries, fabless semiconductor company sales growth versus IDM (integrated device manufacturers) semiconductor supplier growth has typically been very different (Figure 1).  In 2010, for the first and only time on record thus far, IDM semiconductor sales growth (35%) outpaced fabless semiconductor company sales growth (29%).  Since very few fabless semiconductor suppliers participate in the memory market, the fabless suppliers did not receive much of a boost from the surging DRAM and NAND flash memory markets in 2010, which grew 75% and 44%, respectively.

As shown in Figure 2, only three of the top-10 IDM semiconductor suppliers are forecast to register growth in 2015 and, in total, the top-10 IDMs are expected to display flat growth this year.  Although flat growth by the top-10 IDMs would typically be considered poor performance, it is still forecast to be a much better result than is expected from the top-10 fabless semiconductor suppliers (Figure 3).  In order to make direct comparisons for year-over-year growth, IC Insights combined the merged, or soon to be merged, companies’ 2014 and 2015 semiconductor sales regardless of when the merger occurred.

As shown, the top-10 fabless semiconductor suppliers are forecast to register a 5% decline in sales this year, five points worse than the top-10 IDMs.  It should be noted that essentially all of the decline expected for the top-10 fabless suppliers in 2015 could be attributed to the forecasted decline in Qualcomm/CSR’s sales this year.  Much of the sharp decline in Qualcomm/CSR’s sales this year is being driven by Samsung’s increasing use of its internally developed Exynos application processor in its smartphones instead of the application processors it had previously sourced from Qualcomm.

Fig 1

Fig 1

Fig 2

Fig 2

Fig 3

Fig 3

Application processor sales to fabless/system house Apple from pure-play foundry TSMC are included in the fabless company sales ranking under the “Apple/TSMC” moniker.  Application processor sales supplied to Apple from IDM-foundry Samsung are included as part of Samsung’s logic IC sales.

As mentioned in the title of this Research Bulletin, 2015 could end up being only the second year ever, after 2010, in which the IDM semiconductor suppliers outpace the fabless semiconductor suppliers with regard to year-over-year growth.  Whether this actually takes place will be revealed from IC Insights’ extended compilation of the IDM and fabless semiconductor company rankings for the 2016 McClean Report.

The European Commission has approved under the EU Merger Regulation the acquisition of Broadcom Corporation by Avago Technologies Limited. Both companies are global manufacturers of semiconductors. The Commission concluded that the merged entity would continue to face effective competition in Europe.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Thanks to very good cooperation with the companies the Commission has been able to approve this multi-billion dollar takeover within a very short space of time while preserving effective competition in this crucial high-technology sector.”

The Commission’s investigation showed that the portfolios of the companies are mainly complementary since Broadcom makes “off-the-shelf” chips for the broadband and connectivity market segments, while Avago makes custom-built chips for special applications in the analog wireless integrated circuits, enterprise, storage and industrial segments.

Nevertheless, the Commission had some concerns about the vertical relationship created by the transaction, since Avago supplies certain intellectual property (technology for allowing fast data transmission between chips) to some of Broadcom’s competitors. The Commission’s concern was that after the takeover Avago could have had an incentive to withhold this intellectual property in order to extend the merged entity’s leading market position in the so-called “switch chips” market.

However, already during the Commission’s assessment of the case, Avago addressed these concerns by entering into commercial agreements with other “switch chip” manufacturers. These agreements will ensure that other “switch chip” manufacturers will continue to have access to the necessary intellectual property on reasonable terms. Thanks to this up-front solution, the Commission has been able to unconditionally clear the proposed transaction, which was notified on October 2, 2015.

Related news: 

Avago Technologies acquisition of Broadcom creates a new semiconductor powerhouse

Historic era of consolidation for chipmakers