The SV150 started the year with 39 semiconductor companies and ended it with 36, the result of some brisk merger and acquisition activity that seems likely to continue in 2015.
The sector makes up about a quarter of the companies in the SV 150, this newspaper’s annual ranking of the largest publicly traded Silicon Valley companies by revenue, and ranks fourth out of seven sectors in sales.
Spansion was acquired by Cypress Semiconductor; LSI was snapped up by Avago Technologies, and Silicon Image was acquired by Lattice Semiconductor.
“It was a year of rich mergers and acquisition activity,” said analyst Tristan Gerra with Robert Baird & Co.
The activity’s two drivers, he said, were high stock valuations that made it a good time to sell and strong balance sheets with a lot of cash on hand on the part of acquiring companies.
A steeper-than-expected increase in PC sales in the second and third quarters helped buoy the sector.
Chip companies had $106.2 billion in sales, $17 billion in profit, and $306 billion in stock market value.
Sales grew a modest 3.6 percent in 2014, but net profit leapt 26 percent from the year before. Share prices were up 9.4 percent.
Helping boost the sector was chip giant Intel, which finished 2014 by turning in its most profitable quarter and year in its history, with a net profit of $11.7 billion on $55.9 billion in sales. Profit was up 22 percent and sales increased 6 percent.
Along the way, it took a $1.5 billion stake in a Chinese chipmaker, acquired health wristband maker Basis Science and redoubled its efforts to crack the mobile market by spending $4.21 billion in discounts to persuade tablet and phone makers to buy its Atom chips.
Applied Materials, which makes and sells semiconductor manufacturing equipment, racked up a net profit of $1.2 billion — an increase of 153 percent — on sales of $9.2 billion.
AMD posted a loss of $403 million on $5.5 billion in sales for fiscal 2014.
The graphics chip maker NVDIA had a 43 percent gain in net profit on a 13 percent gain in sales of $4.7 billion.
Contact Pete Carey at 408-920-5419 Follow him on Twitter.com/petecarey
