Thanks for this Doug. On the SIMO transaction, the stock has moved up about 20% since you wrote this (I think the Semi index is flat or down slightly). What do you think the market is seeing here ? More positive on SIMOs business or greater likelihood the deal is approved?
1) SIMO is actually a Taiwanese company with 90%+ of employee and HQ in Taiwan.
2) I don't think SAMR will publish anything other than their final decision on a deal on their website. I've tried to find filings on INTC / TSEM on their website but also could not find anything.
On the SIMO / MXL deal, is there not an argument to be made that SAMR could let this deal go through in order to impose price / product restrictions in favour of Chinese customers of both companies? Beyond just muscle-flexing, it strikes me that with no product overlap and minimal strategic threat, this deal can be used to China’s benefit. MXL will have to pay $160m if SAMR blocks the deal, so they have a reason to give in to some demands.
Also, why first reject the simple filing, then accept the filing under the normal procedure if the plan was just to kill the deal anyway for purely political reasons? Seems like unnecessary delays that muddy the message you’d want to send if you were just trying to block anything in this space for political reasons.
interesting read, thanks. i got impression that tower deal may be bigger imprortance vs. potential losses in China market? But I guess only so much losses can be tolerated... interesting how this will unfold. Too many uncertainty factors in world today.
Is there any other way that the deal can be structured without requiring China approval ? Like tower selling jazz to intel or form a partnership in the format similar to what intel did with Brookfield?
What are your thoughts today about the deal?
Thanks for this Doug. On the SIMO transaction, the stock has moved up about 20% since you wrote this (I think the Semi index is flat or down slightly). What do you think the market is seeing here ? More positive on SIMOs business or greater likelihood the deal is approved?
Interesting read.
Also on the SIMO one.
1) SIMO is actually a Taiwanese company with 90%+ of employee and HQ in Taiwan.
2) I don't think SAMR will publish anything other than their final decision on a deal on their website. I've tried to find filings on INTC / TSEM on their website but also could not find anything.
Thanks for the article.
On the SIMO / MXL deal, is there not an argument to be made that SAMR could let this deal go through in order to impose price / product restrictions in favour of Chinese customers of both companies? Beyond just muscle-flexing, it strikes me that with no product overlap and minimal strategic threat, this deal can be used to China’s benefit. MXL will have to pay $160m if SAMR blocks the deal, so they have a reason to give in to some demands.
Also, why first reject the simple filing, then accept the filing under the normal procedure if the plan was just to kill the deal anyway for purely political reasons? Seems like unnecessary delays that muddy the message you’d want to send if you were just trying to block anything in this space for political reasons.
interesting read, thanks. i got impression that tower deal may be bigger imprortance vs. potential losses in China market? But I guess only so much losses can be tolerated... interesting how this will unfold. Too many uncertainty factors in world today.
Is there any other way that the deal can be structured without requiring China approval ? Like tower selling jazz to intel or form a partnership in the format similar to what intel did with Brookfield?