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12/23/2005
03:31 PM
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Tech Investment Analyst Bullish On 2006 Semiconductor Market

Mergers and acquisitions, initial public offerings, and some consolidation prompted by large diversified companies looking for successful fledglings to fill technology holes could make 2006 a good year for semiconductor technologies, a Jefferies Broadview analyst said.

Some Wall Street analysts are glum about 2006 for the U.S. economy because of fears of rising energy costs and bursting housing bubbles. But semiconductors may be a bright spot, said David Creamer, managing director at technology investment banking firm Jefferies Broadview.

There are expectations 2006 will be a good year for semiconductor technologies as mergers and acquisitions, initial public offerings, and some consolidation is prompted by large-diversified companies looking for successful fledglings to fill technology holes, he said.

"The semiconductor price index climbing 20 percent in the last couple of months" is a positive sign, Creamer said.

Global M&A activity has been steady in the years since the technology bubble burst. In 2005, about 58 deals have closed, up from 54 in 2004 and 56 in 2003. Although the number has remained nearly flat, the medium size financial transaction doubled. This year, announced medium size deals reached $51.1 million, up from $26 million in 2004, and $18 million in 2003.

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