At one end of the scale, Singapore-based semiconductor firm Avago Technologies announced in May it would buy US-based chipmaker Broadcom for $37 billion – the biggest ever technology acquisition, according to Bloomberg.

At the other end, Taiwanese semiconductor designer MediaTek has been gradually scooping up local integrated circuit (IC) competitors to the point that its September announcement to bid for Richtek could take it to 50% of the local IC design market by revenue, according to Taipei-based publication Digitimes.

The actions from the two companies – the 12th and 13th-largest semiconductor suppliers by sales during the first half of 2015, according to US-based market research company IC Insights, could be a sign of things to come in Asia’s technology sector. Technology companies are searching for stability during a slowdown period for many markets, particularly the smartphone.

“The world is getting saturated in smartphones,” said Nicolas Baratte, Hong Kong-based head of technology research at CLSA. “After the smartphone, we can’t really identify one big product category that is going to generate a lot of growth. Therefore, consolidation helps a bigger-platform company through more diversification.”

Semiconductor devices are at the cutting edge of electronics technology. They paved the way for miniaturisation that has created circuit boards the size of a grain of salt, and they are vital operating components in everything from your home PC to cars, missile systems and communications technology.

Mobile phones were the biggest end-users for integrated circuits in 2014 – accounting for 25% of sales, according to IC Insights. Smartphones reached 70% of mobile market share by the end of last year.

The problem that has emerged this year has been that while smartphones are expected to finish the final quarter with 80% mobile phone market share, sales growth has dropped dramatically, particularly in the largest market, China.

“There’s almost no growth left in Chinese, US or European smartphone markets,” said Baratte. “The smartphone market in China is near 90% penetration. Once you hit 90%, the only people who don’t have a smartphone are people like my mother, people who don’t care.”

Volumes in China, where 30% of the world’s smartphones are sold, fell 4% in the second quarter, according to US-based technology research and advisory firm Gartner. This was the first time shipments dropped. Global sales growth is expected to be 10.4% this year compared to 28% last year, according to the International Data Corporation.

While the knock-on effect on semiconductor demand has been clear – in August, IC Insights lowered its worldwide growth forecast to 2% in 2015 from 5% – low-cost smartphone demand in emerging markets is booming, up 40% in the first quarter from the same period in 2014, according to Gartner.

This has helped Chinese manufacturers that specialise in low-end units – typically under $200. Companies such as Huawei, Lenovo and Xiaomi – the third, fourth and fifth biggest vendors respectively – boosted their market share by 0.5% to 17.5%, according to Gartner.