SPWR - Semiconductor Valuations Support Further Industry Consolidation
Introduction
In the last two months, semiconductor stocks have experienced a ~16% correction in equity valuation, and with more reasonable valuations, we recommend investors begin compiling a potential list of industry takeout targets. According to the most recent GCA Semiconductor Sector Report, 10 years ago, there were 130 public semiconductor companies; at the end of 2018, there were 72; and we think in the next 3-5 years, there will be half as many publicly listed companies versus current levels.
Thus, we view those companies which have efficiencies such as technical knowledge, cost, or scale