4 Likely Semiconductor Merger and Acquisition Targets

IDT’s earnings reported early in May showed that its fourth-quarter revenue was up 6.6% to $189.4 million, and fiscal year revenue was up 21.7% at $697.4 million. Greg Waters, president and chief executive officer of IDT, said:

We concluded fiscal year 2016 with fourth quarter revenue of $189.4 million, our 10th consecutive quarter of year-over-year revenue growth. This strength in the quarter was driven by sales of communications infrastructure products, automotive and industrial products, and wireless power products. The acquisition of ZMDI is already yielding tremendous benefits to IDT and we remain on track with the integration, which should be completed by December of this year.

Full year fiscal 2016 revenue grew by over 21 percent to reach $697 million, and was driven by sales of our wireless power products, and High Performance Computing/Data Center products. We remain very focused on operational excellence and achieving our target operating model which includes 30 percent operating margin and 30 percent annual free cash flow. We are well-positioned to continue outgrowing the semiconductor market overall, and to deliver best-in-class profitability and earnings power.

Shares of IDT were recently trading at $23.38, with a consensus analyst price target of $27.70 and a 52-week trading range of $14.50 to $29.04.


InvenSense Inc. (NYSE: INVN) designs and makes sensor systems on a chip globally, and it has a $575 million market cap. Interestingly enough, in early May it reported that fourth-quarter revenue of $79.5 million was down 34% from its third quarter and down 20% from its fourth quarter of the prior fiscal year. Still, non-GAAP gross margin was 45% versus 44% from the prior quarter.

Behrooz Abdi, president and CEO of InvenSense, said at the quarter:

The fourth quarter was a solid quarter, capping off a productive year for InvenSense. Throughout fiscal 2016, we drove significant technology advancement in key use cases that are fueling sensor adoption today. These use cases can be applied across a variety of vertical markets and applications, which we believe will enable us to maximize our R&D investments and drive significant TAM expansion. Our market-leading solutions continued to gain traction in emerging Internet of Things (IoT) platforms such as drones, virtual and augmented reality, wearables, smart home, and industrial applications. We believe that the broad applicability of our portfolio positions us for continued diversification and growth in these exciting markets.

InvenSense shares were last seen trading at $6.15. The stock has a consensus price target of $7.92 and a 52-week range of $5.42 to $16.40.


MaxLinear Inc. (NYSE: MXL) provides integrated radio-frequency (RF) and mixed-signal circuits for communications systems. These range from broadband and data center to major metro and long-haul transport network applications. With its $1.3 billion market cap, the company’s stock just hit a 52-week high that also looks like a post-IPO high from the past five years or so.

MaxLinear announced earnings at the start of May. MaxLinear’s first fiscal quarter of 2016 saw its revenue increase by 190% to $102.7 million, and its net income increased 505% to $19.1 million. The company also announced the acquisition of Broadcom’s wireless infrastructure backhaul business, and it also recently acquired wireless assets from Microsemi.

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