Chipmakers will continue gobbling up one another this year, and deep-pocketed giants like Qualcomm Inc. (IW 500/44) and Samsung Electronics Co.  (IW 1000/12) are under pressure to enter the fray.

While semiconductor companies spent a record $113 billion on acquisitions in 2015, the biggest players mostly stayed on the sidelines -- the exception being Intel Corp., which bought Altera Corp. for $16 billion. Now Qualcomm, having fended off calls to split the company in two, says it has the cash to do deals. While Samsung prefers to build rather than buy, analysts say its stated interest in the so-called Internet of Things means it will probably have to go shopping.

Chipmakers have three good reasons to keep making deals. Scale has become increasingly important in an industry grappling with rising production costs and intensifying competition. It’s a target-rich environment, with more than 500 public companies generating less than $1 billion in sales. And despite last year’s acquisition frenzy, the biggest 20 chipmakers are still sitting on more than $130 billion in cash.

“There’ll be another wave of consolidation,” said  Suji De Silva, a Topeka Capital Markets analyst. “These guys have the cash, the cash flow and they’re willing to lever up.”

Qualcomm and Samsung face competition from China, which has vowed to build a domestic chip industry to reduce its reliance on imports. While some initial efforts to acquire foreign firms have been rebuffed on concern that they won’t pass U.S. regulatory muster, China is expected to keep trying to use some of the more than $100 billion it has set aside for acquisitions.

Analysts expect Qualcomm to be the most aggressive deal-maker. With a cash hoard of $30 billion, the world’s biggest maker of mobile phone processors and modems wants to expand into server processors, chips for cars and the Internet of Things, technology that connects light bulbs, factory equipment and more to the Web.

“As we see things we want we can go after them,” CEO Steve Mollenkopf said in an interview. “We purposefully have the balance sheet to enable us to makes moves.”

Potential targets include Cavium Inc., Applied Micro Circuits Corp. and Advanced Micro Devices Inc. -- companies that would help jump-start Qualcomm’s push into servers. None would make much of a dent in its cash pile. The biggest of the three, Cavium, has a market capitalization of about $3.5 billion. Another potential target: Xilinx Inc., which makes chips used in data centers and Web-connected devices.

American Money Management fund manager Mike Green wants Qualcomm to buy Skyworks Solutions Inc., which makes chips used by smartphone makers such as Apple Inc.

Besides winning more business from Apple, Qualcomm “would also become the dominant Internet of Things stock, and that’s where the big money is in the next three to 10 years,” Green said.

Samsung Electronics is a harder read. While the South Korean company has the biggest cash balance at more than $50 billion, it hasn’t done a major deal in 10 years.

But with its mobile phone unit losing ground to Apple and Chinese upstarts, Samsung has become increasingly reliant on its chip division for profit. SanDisk Corp. might have made a good fit -- Samsung looked at the flash memory giant in 2009 -- but Western Digital Corp. agreed to purchase it last year for about $16 billion. Like Qualcomm, Samsung sees the Internet of Things as a promising business.

The company has a large team looking at acquisitions, according to Mark Newman, a Sanford C. Bernstein analyst who previously worked in Samsung’s corporate development department.  Samsung has already bought smaller companies in the medical equipment and display technology areas, he said, and is now more likely to do a multiple-billion-dollar purchase.

Texas Instruments also sat out the deal-making party last year, opting not to buy Maxim Integrated Products Inc. after deciding it couldn’t offer enough to get the deal done, according to people familiar with the process. Publicly at least, Texas Instruments remains cautious. Company executives say valuations are too high and that they prefer to focus on share buybacks and raising the dividend.

“If you look at the valuations that people have been paying for semiconductor companies in the last 12 months to 18 months, it’s a little bit difficult for us to understand how they’re going to get the kind of return that their shareholders should expect on those investments,” Texas Instruments CFO Kevin March told analysts last month.

Still, the market rout this year could make acquisitions more tempting. The benchmark Philadelphia Stock Exchange Semiconductor Index is down 12% in the last 12 months. The index of chip stocks’ current price to earnings ratio is 20.58, its lowest annual level since 2011.

Moreover, as Qualcomm CEO Mollenkopf pointed out, interest rates haven’t risen significantly and it’s still possible to raise cash for acquisitions.

“Money’s still cheap,” he said.