A Performance Case Study Of TCL Technology Acquisition Of Zhonghuan Corporation Under The Perspective Of Industrial Chain Extension

Industrial chain extension is an important way to expand the scale of an enterprise and achieve benign development of a company in the process of development,among which enterprise mergers and acquisitions is one of the main methods of industrial chain extension.Since the reform and opening up,China’s high-tech industry has been developing rapidly,and a long wave of industrial upgrading has been set off in industries such as semiconductor,lithium battery and Internet.Therefore,in order to ensure the healthy development of enterprises and enhance the competitiveness and enterprise value of companies,more and more companies have started to extend their industrial chain through corporate mergers and acquisitions.Semiconductor industry is a national strategic priority development project in China’s 14th FiveYear Plan,and it is also a strategic security level industry in the world,especially in developed countries,which is a major consumer of electronic products in the world.However,because many semiconductor companies in the international market have formed an all-round industry leader,and due to the large dependence on talent,high technical barriers,so China’s semiconductor industry is difficult to achieve short-term rapid development.Therefore,China’s semiconductor companies need to reasonably integrate industry resources in order to break through foreign blockade restrictions and achieve full domestic substitution,and therefore need to conduct corporate mergers and acquisitions to achieve industry chain extension that is rapid development.This paper selects the typical case of China’s semiconductor company TCL Technology’s acquisition of Zhonghuan Semiconductor,refers to the development status of related enterprises in the same period,and explores the short-term market effects and changes in corporate financial performance before and after TCL Technology’s acquisition from the perspective of industry chain extension by integrating literature analysis,event study method,and financial index method.Through analyzing "why TCL Technology acquired Zhonghuan Semiconductor","how TCL Technology acquired Zhonghuan Semiconductor" and "the reasons and revelation of performance growth after the acquisition",the paper explores How TCL Technology achieved the breakthrough of high-tech barriers and the extension of industrial chain through M&A,expanded the profit scale and market influence of the enterprise,further explored the opportunities and discovered the possible risks brought by M&A.After the merger and acquisition,TCL Technology has formed a rapid extension from upstream semiconductor materials to downstream semiconductor products,and on this basis,it continues to rapidly expand its market share,achieve product diversification and obtain new corporate growth points.The EVA value added method and factor analysis method are introduced to construct a vertical and horizontal three-dimensional financial evaluation system to explore the integration of the industry chain after M&A,to provide reference for the accelerated development of the semiconductor industry,and to provide some reference value for the implementation of M&A strategies of semiconductor enterprises in China.Based on the development status of China’s semiconductor industry,this paper combines the changes in the global economy,the future development trend of the industry,the positioning of enterprises and the national development needs,takes the M&A in the perspective of industry chain extension as the starting point,takes the enterprise M&A and industry development characteristics as the reference,combines the characteristics of the semiconductor industry,builds the evaluation system of enterprise M&A in the perspective of industry chain extension,provides suggestions for China’s semiconductor It will provide suggestions for the implementation of industry chain extension M&A in China’s semiconductor industry,promote the construction of the whole industry chain of China’s semiconductor enterprises,accelerate the integration of resources in China’s semiconductor industry to break the blockade of other countries’ technology and equipment,and promote the development of China’s semiconductor industry layout.