The Competition and Consumer Commission of Singapore (“CCCSâ€) has cleared the proposed acquisition by Analog Devices, (“ADIâ€) of Maxim Integrated Products.
Following its assessment, CCCS has concluded that the Proposed Transaction, if carried into effect, will not infringe the section 54 prohibition of the Competition Act (Cap. 50B) (“Actâ€).
CCCS received a joint application from the Parties on 17 December 2020 for a decision on whether the Proposed Transaction would infringe section 54 of the Act, which prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.
ADI designs, manufactures, and markets a broad line of integrated circuits (“ICsâ€) that incorporate analogue, mixed-signal and/or digital signal processing technologies and are designed to address a wide range of real-world signal processing applications. Maxim designs, develops, manufactures and markets a range of analogue, mixed-signal and digital ICs. Broadly, the Parties overlap in the supply of analogue ICs, microprocessors (“MCUsâ€) (a type of digital IC), and temperature and other sensors globally.
As part of its assessment, CCCS conducted a public consultation from 24 December 2020 to 8 January 2021, and contacted one hundred and eight (108) stakeholders including the customers and competitors of the Parties for their views.
CCCS further found that the Parties’ product portfolios are generally complementary in nature, and that they are not each other’s closest competitor in any of the Relevant Markets.
CCCS noted that there remain many other strong competitors, such as Texas Instruments Incorporated post-Proposed Transaction, and that customers are able to switch between alternative suppliers. In this regard, CCCS notes that customers can switch between suppliers easily when they are sourcing for ICs to be designed into their products. After the product is designed, time and cost are needed for product re-design or qualification but these barriers to switching are not insurmountable. Customers also generally do not enter into long term supply arrangements with suppliers that will limit their ability to switch.
CCCS assessed that large customers may be able to exert countervailing buyer power by influencing prices and sales terms especially if they can design and/or manufacture ICs in-house.
CCCS also considered that collusion between semiconductor suppliers is unlikely post-Proposed Transaction due to the following: (a) the large number of competitors worldwide and in Singapore, (b) relatively low price transparency across all the Relevant Markets owing to bilateral negotiations between suppliers and customers, and (c) product differentiation in the Relevant Markets, especially in relation to ASSPs. ■