Semiconductor M&A could be posed for a rebound as a regulatory induced cooling effect shows signs of thawing. Supply shortages and increased political willingness to invest in domestic production could revive dealmaking in a sector in which 80 percent of deal value was below the $1 billion mark for five years running. Business-to-business technology investment firm Cota Capital’s PV Bóccasam points the way.

“Shifting geopolitical issues—especially as it relates to China and Europe—and post-Covid complexities have driven a new way of thinking of post-Covid investments,” Bóccasams said today at EisnerAmper’s Alternative Investment Summit. “We think there’s going to be a rebirth of the semiconductor industry because we rely on one main source to get access to silicon-based chips.”

Foundries and chip making plants increasingly present opportunities for investors, he said, as do adjacent technologies. “AI systems are now being installed inside of chips now for faster recognition,” according to Bóccasam. “It’s a simple thing to bring semiconductor design and manufacturing back into the U.S.”

The optimism comes on the heels of chipmaker GlobalFoundries’ August reported filing for an IPO, following Intel’s (Nasdaq: INTC) $30 billion takeover approach.

And it stands in contrast to middle market M&A activity in the space. Antitrust interventions into proposed transactions like Qualcomm’s (Nasdaq: QCOM) $44 billion bid to acquire NXP Semiconductor’s (Nasdaq: NXPI), and Qualcomm’s subsequent $117 billion approach from Broadcom have effectively limited subsector deal activity to smaller transactions, according to a recent note from Accenture.

Brandon Zero