From Dio Micro to Hygon Information, and now Verisilicon Microelectronics (Shanghai) Co., Ltd. (688521.SH), chip companies listed on the STAR Market have seen a series of major asset acquisitions terminated within just one week.
On the evening of December 12, Verisilicon announced the termination of its plan to acquire a 97.0070% stake in Xinlai Zhirong Semiconductor Technology (Shanghai) Co., Ltd. ("Xinlai Zhirong") and raise supporting funds. Simultaneously, the company revealed plans to jointly invest with other parties in a special purpose vehicle, Tiansui Xinyuan Technology (Shanghai) Co., Ltd. ("Tiansui Xinyuan"), with an investment amount reaching RMB 370 million. Tiansui Xinyuan will serve as the acquisition vehicle to take control of Pixelworks Semiconductor (Shanghai) Co., Ltd.
Verisilicon attributed the termination to "discrepancies between the core demands and key terms proposed by the target company's management and counterparties, and the current market environment, policy requirements, and the interests of the company and all shareholders."
Notably, Verisilicon's stock price surged over 7% on the day of the announcement, defying expectations.
The terminated M&A deal had been in progress since August 28, 2025, when Verisilicon signed a "Share Purchase Intent Agreement," leading to a trading halt on August 29 and resumption on September 12.
Verisilicon assured that the termination would not adversely affect its normal operations or harm shareholder interests. The company reiterated its commitment to strengthening its presence in the RISC-V sector and maintaining cooperation with Xinlai Zhirong as a shareholder.
Meanwhile, Verisilicon's new investment plan involves Tiansui Xinyuan increasing its registered capital by RMB 940 million. Verisilicon will contribute its 2.11% stake in Pixelworks Semiconductor and RMB 350 million in cash, securing a 40% stake in Tiansui Xinyuan and becoming its largest single shareholder with majority board control.
Pixelworks Semiconductor, established in 2004, was formerly the sole wholly-owned subsidiary and largest R&D center of Pixelworks in China. It specializes in visual processing chips for mobile devices, video transcoding chips, and 3LCD projector controller chips.
Verisilicon, listed in 2020, is a leading provider of chip customization and semiconductor IP licensing services in China, holding the top market share in semiconductor IP licensing in 2024.
Analysts suggest Verisilicon's strategic pivot reflects a shift in integration methods, with the market responding positively. However, industry experts predict more failed M&A announcements in China's semiconductor sector, particularly among listed companies.
In the past month alone, 21 A-share companies, including Verisilicon, *ST Busen, Hygon Information, and Dio Micro, have terminated M&A deals, with semiconductor firms prominently represented.
Reasons for terminations vary but often revolve around disagreements on key terms, market volatility, and policy misalignments. For instance, Dio Micro's deal with Rongpai Semiconductor collapsed due to unresolved core terms, while Hygon Information's merger with Sugon was impacted by valuation shifts.
Experts highlight challenges such as high integration costs, regulatory risks, and technological complexities in semiconductor M&As. Despite setbacks, acquisitions remain a critical growth path for domestic analog chip firms, which lag behind global giants in scale and product portfolios.
China's semiconductor industry, after a decade of rapid expansion, now faces a cooling capital market and valuation corrections, complicating deal-making. With over 400 analog chip design firms in China, none have yet achieved global competitiveness, underscoring the need for strategic consolidation.
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