Apr 12, 2017

Xcerra deal will test U.S. policy on Chinese chips

Sino IC Capital of China this agreed to acquire Xcerra Corp., a Massachusetts-based semiconductor testing company. The deal is valued at $580 million in cash, or $10.25 per share.

Why it matters: U.S. regulators have been particularly finicky when it comes to Chinese takeovers of domestic chip companies, and approval/disapproval of this deal could be viewed as a Trump-era guidepost (alongside a previously-announced purchase of Lattice Semiconductor, which remains in the midst of regulatory review). The market's early read isn't terribly optimistic, as Xcerra shares haven't even hit the $10 mark since the deal was announced.

Bottom line: "Shortly before leaving office in January, former President Obama made public a report by advisors and semiconductor industry insiders that warned of the threat posted to the U.S. semiconductor industry by China's aggressive moves to become a global player in the chip space, including the acquisition of U.S. firms." ― Dylan McGrath, EE Times

Go deeper