Automotive Mergers and Acquisitions Point to Clear Road Ahead for EVs
Mergers and acquisitions help companies bypass the R&D stage and stay competitive. Here are some recent M&As that may accelerate electric mobility.
The automotive industry is undergoing a shift toward electric vehicles. Even gas-powered cars now rely on features like connectivity, autonomous driving, and e-mobility. These more advanced technologies are inspiring automotive industry players to expand their portfolios, particularly through strategic mergers and acquisitions.
Diagram of an all-electric vehicle. Image used courtesy of the Alternative Fuels Data Center
Automotive companies and component manufacturers continually look for promising startups to expand their technology offerings and keep pace with consumer demands for more autonomy. To this end, the number of mergers and acquisitions has risen significantly in the past few years—with many occurring in the electric vehicle (EV) industry.
Allegro Microsystems Acquires Heyday
Allegro Microsystems produces sensing and power semiconductor solutions for motion control and energy-efficient systems. On May 31, 2022, the company announced the acquisition of Heyday Integrated Circuits, which specializes in compact, integrated isolated gate drivers for gallium nitride (GaN) and silicon carbide (SiC) wide-bandgap semiconductor high-voltage converter designs. The acquisition will extend Allegro's portfolio for EVs, solar inverters, data centers, and 5G power supplies.
Traditional gate drivers require large footprints and additional components to achieve EMC (electromagnetic compatibility) compliance. Heyday's gate driver solutions use a single, small-footprint package that integrates an isolated gate driver and associated components, thanks to Heyday's Power Thru isolation technology.
Heyday’s compact gate driver offerings. Image used courtesy of Heyday Integrated Circuits
The technology integrates a tiny magnetic isolation structure to allow efficient power transfer across the boundary for low-voltage control signals to a high-voltage system. The isolation boundary carries both the drive information and drive energy to enable a smaller package.
These gate driver solutions may help system designers leverage the potential of wide-bandgap semiconductor transistors. The solutions may also increase Allegro's opportunities in green energy applications.
Endurance Technologies Brings Maxwell Into the Fold
On May 19, 2022, Endurance Technologies Limited, an automotive component manufacturer, acquired Maxwell Energy Systems (MESPL), an electronics business unit of ION energy that specializes in smart battery management systems (BMS). With this acquisition, Endurance has introduced its first EV-specific product in its portfolio.
Maxwell's smart and compact BMS solutions are designed for battery swapping applications and integrate many advanced algorithms and sensors for high reliability and efficiency. These BMS are said to allow OEMs and battery manufacturers to offer safe, reliable, and smart battery systems for EVs and other storage systems.
Maxwell intends to leverage this partnership to expand its research and development (R&D) team and launch new product platforms for EVs and energy storage systems.
Hon Hai (Foxconn) Scoops Up arQana
arQana Technologies, a wireless communications business, was also recently acquired by Hon Hai technology group (Foxconn) on April 13, 2022. This deal merges with AchernarTek Inc. to supply radio frequency (RF) semiconductor components for automotive and 5G applications.
iCana's 5G strategy. Image used courtesy of iCana
AchernarTek, arQana Taiwan, and arQana Belgium are uniting under the new brand name iCana. This partnership may strengthen the supply chain in the wireless communications market. Moreover, Foxconn plays an important role by sharing its expertise and novel solutions for 5G-connected EVs.
How These Acquisitions May Benefit the EV Sector
Automotive companies recognize that mergers and acquisitions are a powerful way to stay competitive and accelerate change. Strategic acquisitions in this sector help suppliers extend their portfolios and complement their offerings. Acquisitions can also combine hardware development with data and software innovation.
Automakers are under mounting pressure for more R&D investments. Mergers and acquisitions help businesses tackle these issues and, in turn, accelerate the shift toward electrified drivetrains.