Semiconductor Fair | China's Semiconductor Industry Enters a New Phase of Consolidation: Technology-Driven M&A Becomes the Dominant Trend

Driven by both industrial policy and market demand, China's semiconductor industry is undergoing an unprecedented wave of consolidation. According to the Semiconductor Fair, the STAR Market-listed IC design firm Jingfeng Mingyuan recently unveiled a major asset restructuring plan. The company intends to acquire a controlling stake in Sichuan E-Chong Technology, a wireless charging chip company, through a combination of equity, convertible bonds, and cash—a representative case of recent semiconductor supply chain consolidation.

“M&A activity in the semiconductor sector has now entered a new, technology-driven phase,” said Zhou Mingyuan, a member of the Expert Committee of the China Semiconductor Industry Association. “Unlike earlier expansion-oriented deals, today’s mergers focus more on acquiring critical technologies and enhancing product portfolios to build a more resilient industry ecosystem.”

1. Technology Synergy at the Core of M&A Deals

Jingfeng Mingyuan, a leading domestic provider of power management ICs, has consistently ranked among the top in China's LED driver chip market for the past five years. Its target company, Sichuan E-Chong Technology, holds 87 invention patents in magnetic resonance wireless charging and has passed Qi2.0 certification with its second-generation wireless charging chip. If completed, this acquisition would allow both parties to complement each other’s strengths in power management technologies.

According to incomplete statistics, 23 M&A transactions have been announced in China’s A-share semiconductor sector in the first three quarters of 2024, with a total deal value exceeding RMB 18 billion. Notable cases include JCET’s acquisition of a packaging and testing company and Focuslight Technologies’ merger with an optical component manufacturer—both of which highlight strong technological synergies.

“This vertical integration model is reshaping industry competition,” said Wang Lixin, an expert advisor with the Electronic Information Department of the Ministry of Industry and Information Technology. “By acquiring key technologies through M&A, companies can shorten R&D cycles and deliver more integrated solutions—an especially crucial capability under the current geopolitical landscape.”

2. Cross-Sector M&A Signals Emerging Industry Shifts

The current wave of consolidation has also seen a surge in “cross-sector players.” For example, chemical company Baiao Chemical invested RMB 700 million through a subsidiary to acquire a stake in a semiconductor materials company, while pharmaceutical firm Double-Crane Pharmaceutical is planning to fully acquire RF chip design company Aura Semiconductor. These deals reflect traditional industries’ efforts to pivot toward semiconductors.

“These cross-sector acquisitions point to two major trends,” noted Professor Li Guoqiang from the School of Integrated Circuits, Tsinghua University. “First, the strategic importance of the semiconductor industry is now widely recognized. Second, traditional companies are using M&A as a vehicle for business transformation. However, it’s worth noting that semiconductors involve high technical barriers, and successful post-merger integration of technologies and teams is critical.”

3. Policy Support Fuels Continued Integration

Policies such as the Regulations on Promoting the Semiconductor Industry and the “Six Guidelines for M&A” are providing institutional support for industry consolidation. In particular, the introduction of an expedited M&A review mechanism has shortened the average review period for semiconductor M&A cases to just 45 working days—a 60% improvement over previous years.

Market research firm IC Insights forecasts that China’s semiconductor M&A volume will surpass RMB 30 billion in 2024, with design companies accounting for 42% of deals. M&A activity in materials and equipment is also on the rise. As new technologies like third-generation semiconductors and Chiplet architecture mature, further consolidation is expected.

“We anticipate three defining characteristics of M&A activity in the next two years,” said Zhang Wei, Partner at Ernst & Young Hua Ming LLP. “First, a stronger focus on leaders in niche segments; second, an increase in cross-border technology deals; and third, deeper participation from industrial capital. These developments will drive China’s semiconductor industry toward higher-quality growth.”

Insiders reveal that several industrial investment funds—including the National IC Fund—are preparing to launch dedicated M&A funds to support consolidation in key areas of the semiconductor supply chain. With strong backing from both policy and capital, China’s semiconductor sector is accelerating its transformation into a more competitive and robust ecosystem through strategic mergers and acquisitions.

Join us at NEPCON China 2025 April 22-24, 2025, for an unparalleled opportunity to expand your network, engage in direct business matchmaking, and access innovative technologies that will shape the future of electronics manufacturing!

Pre-register for NEPCON China 2025: https://ali2.infosalons.com.cn/reg/NEPCON25SH/registeren/login?type=WE9ZIC

If interested in exhibiting at NEPCON China, please contact

Ms. Julia Gu

Tel: +86 21-2231-7010

Email: [email protected]

If interested in visiting NEPCON China, please contact

Mr. Walden Li

Email: [email protected], [email protected]

Mobile/WhatsApp/WeChat: +86 136-5125-1335

For TAP service, please contact:

Mr. Alan Li

Email: [email protected]