Since the mid 1980s, The Carlyle Group has posted some of the strongest returns in the private equity space. Part of it is from picking good companies. Another key element is the firm's discipline on pricing.

That looks to be the case in Carlyle's attempt to buyout of Advanced Semiconductor Engineering (ASE) for $5.5 billion.

Actually, Carlyle bumped up the price a bit; that is, about 1.2%. But, it was not enough to get ASE shareholders excited (I wouldn't be either).

Based in Taiwan, ASE is the largest semiconductor tester and packager in the world. And, with the growth in electronics – such as cell phones, Apples's (Nasdaq: AAPL) iPods and so on – the growth potential looks good. But, of course, the industry can be volatile, which can make it difficult when piling debt on a company.

Although, Carlyle's still appears to have ambitions in the semiconductor industry, as well as markets in Asia. For example, the firm may be looking to Japan for chip companies.

But, to get deals done, Carlyle may have to change its tact – and pay up.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Private equity firms are certainly hungry for semiconductor firms, such as the $17.6 billion buyout of Freescale. And recently there was the proposed $5.5 billion deal for Advanced Semiconductor Engineering.

An analyst at Prudential, Mark Lipacis, has put together a buyout list. Basically, he focuses on what private equity firms like -- lots of cash and cash flow.

His picks? Here's a look:

Altera (ALTR)
Analog Devices (ADI)
Linear Technology (LLTC)
Maxim Integrated Products (MXIM)
Texas Instruments (TXN)

Remember, there's a reason that semiconductor companies have lots of cash: the industry is cyclical. If the economy goes south, these companies can wait it out.

And it does look like the economy is slowing down. So if these semiconductor companies take on huge amounts of debt, might they be vulnerable?

Perhaps. But so far, it seems like private equity firms are far from concerned.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Carlyle Group, a mega private equity firm, has made buyout overtures to Advanced Semiconductor Engineering, which is a semiconductor firm based in Taiwan.

Actually, the deal may have some synergies with Carlyle. How? Well, the buyout firm has a collection of semiconductor firms, such as Jazz. In fact, the firm was also involved in the group that purchased Freescale for $17.6 billion. Interestingly enough, Freescale and Advanced Semiconductor do much business together.

Basically, with the worldwide demand for mobile devices, as well as the expected surge from Microsoft Corporation (NASDAQ:MSFT)'s Vista operating system, the prospects for growth for semiconductors looks particularly bright.

And, that's probably why Advanced Semiconductor's chairman and co-founder, Jason Chang, wants to keep his 18.4 stake in the company.

The deal points to something else: US private equity firms are getting interested in Asia. As seen with the Advanced Semiconductor transaction, there are good values in the region. And, of course, US private equity firms have more than enough money to get the deals done. What's more, the lending markets in Asia are particularly attractive because of the rock-bottom interest rates.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.