On July 13, 2020, Semiconductor chipmaker Analog Devices Inc (ADI) announced it would buy rival company Maxim Integrated Products (MXIM), making it the largest M&A deal in the chipmaking sector this year. Reported by Reuters, the transaction to acquire MXIM will cost ADI about 21 billion, the deal is expected to boost ADI’s market share in self-driving and 5G chips.
Interviewed by Reuters, ADI’s Chief Executive Officer, Vincent Roche opined that combining the engineering teams of both companies is expected to enable the design and production of ICs that are more customized and dedicated to clients’ specific needs in certain application fields such as automotive. However, how much benefit could this M&A deal bring to ADI? To answer this question, we looked at the patent data.
Using Patentcloud’s Due Diligence to analyze the patent portfolio of the two companies, it can be observed that from the distribution of the main international patent classification code (MIPC), the technology focus of ADI, and MXIM shows a high degree of overlap. Both filed considerable amounts of patents, predominantly in basic electronic circuit (H03), basic electric element (H01), computing/calculating (G06), and electric communication (H04).
Given the high level of overlap between the two portfolios in R&D, we can conclude that ADI’s acquisition of MXIM, as the ADI CEO anticipated, will enhance the current technical strength of ADI, giving it a better chance of taking a larger chipmaking market share in the future.