A Case Study Of Firm Merger Failure Based On Supplier Risk

The integrated circuit industry is one of the basic industries that are closely related to the development of the national economy,social progress and national security.At the moment when the production capacity of the international integrated circuit industry is saturated,the integrated circuit industry in China currently is still facing the shortage of domestic production capacity.With reference to the planning and layout of the international integrated circuit market,the domestic integrated circuit industry has tremendous room for development.Merging and acquiring in the same industry that follows the principle of industrial consolidation is the most effective and rapid solution to the current strong domestic demand for capacity expansion.However,because of their particularity,integrated circuit design enterprises face the common risk of mergers and acquisitions in the process of mergers and acquisitions as well as higher supplier risks.As one of the few china leading NOR FLASH companies in the world,Zhao Yi Chuang xin failed to mergers Beijing Xi Cheng because of supplier opposing.This paper firstly reviews the case background,introduces the background of the industry,the background of companies and the background of M&A;then explores the problems in the process of Zhao Yi Chuang Xin mergers Beijing Xi cheng,and finds that the adoption of Fabless business model,the behindhand IC industry chain of China,no alternative suppliers in China,the highly monopolized industry of wafer foundries and the complicated certification cycle of chip products determine the status of suppliers is crucial and difficult to switch.But after the merger,the competition with suppliers lead to the outbreak of supplier risk.Based on this,combined with risk management theory,from the perspective of internal environment,risk identification and risk response,we analyze the reasons for the failure of Zhao Yi Chuang Xin mergers Beijing Xi cheng,that is why supplier risk leads to failed mergers and acquisitions.Finally,we put forward risk management suggestions,in the hope of providing a reference for supplier risk management in M&A of Zhao Yi Chuang Xin and other IC Design companies.