Market research firm IC Insights, in its 185-page McClean Report, diagnosed that the semiconductor industry faced a "perfect storm" in the first half of the year unlike anything experienced in the past five years, and that this was merely a prelude to the changing industrial landscape over the next five years.

In this report, IC Insights analyzed the recent surge in M&A activity, including China's aggressive strategy to strengthen its position in the semiconductor industry.

M&A deals reach six times the level of the past five years

The institution stated that there is no other way to explain the massive wave of semiconductor mergers and acquisitions that occurred in 2015 other than through the frenzy of M&A, noting that semiconductor merger values of $72.6 billion (approximately 85 trillion won) were recorded in the first half of 2015 alone.

This figure is six times the annual average number of M&A transactions over the past five years (2010–2014).

First, in March, NXP Semiconductors cash and stockCombined, they acquired Freescale Semiconductor for $11.8 billion (approximately 14 trillion won), and at the end of May, Avago merged with Broadcom for $37 billion (approximately 41 trillion won) by mobilizing both cash and stock. This acquisition amount marks the largest deal in the history of the semiconductor industry. Shortly thereafter, on June 1, Intel made a surprise announcement that it would acquire Altera for $16.7 billion (approximately 19 trillion won) in cash.

IC Insights assessed that 2015 was a year in which a "perfect storm" of mergers and acquisitions struck among major semiconductor companies in need of business expansion, along with sluggish sales in existing market segments.

Accordingly, it was projected that a higher rate of growth would be required over the next five years due to product development and rising prices of advanced technologies. IC manufacturers are now in a position where they must restructure their product portfolios and readjust their strategies to face the massive emerging market of IoT.

It was also predicted that China's ambitious goal of achieving semiconductor self-sufficiency and reducing IC imports would influence future mergers and acquisitions.

IC Insights pointed out that the increase in mergers and acquisitions led by a few major IC manufacturers is one of the key changes explaining the maturity of the industry, and warned that trends such as the massive wave of M&A currently facing the industry, the lack of new entry points for IC manufacturing startups, the shift to Fab-lite (separation of design and manufacturing) business models, and the reduction of manufacturing facilities will drastically change the landscape of the semiconductor industry over the next five years.