Cypress Semiconductor and Broadcom have announced the signing of a definitive agreement under which Cypress will acquire Broadcom's wireless Internet of Things (IoT) business and related assets in an all-cash transaction valued at US$550 million.
Under the terms of the deal, Cypress will acquire Broadcom's Wi-Fi, Bluetooth and Zigbee IoT product lines and intellectual property, along with its WICED brand and developer ecosystem, the companies said.
Broadcom's IoT business unit, which employs approximately 430 people worldwide, generated US$189 million in revenues during the last 12 months. The acquisition will strengthen Cypress's position in key embedded systems markets, such as automotive and industrial, the companies noted. The acquisition will also establish Cypress as a leader in the high-growth consumer IoT market, a segment that includes wearable electronics and home automation solutions.
The transaction, which has been approved by the board of directors of Cypress and Broadcom, is expected to close in the third calendar quarter of 2016, subject to customary conditions and regulatory approvals.
"Cypress is a significant player in the IoT today because of our ultra-low-power PSoC programmable system-on-chip technology, but we've only been able to pair it with generic radios so far. Now we have the highly regarded Broadcom IoT business - state-of-the-art Wi-Fi, Bluetooth and Zigbee RF technologies - that will transform us into a force in IoT and provide us with new market opportunities as well," said Cypress president and CEO TJ Rodgers. "What we bring to the party is over 30,000 customers worldwide who need advanced, ultra-low-power wireless communication but only can absorb it in the form of an easy-to-use programmable embedded system solution."
"We are thrilled to be joining forces with Cypress to address the fast growing IoT market," Broadcom IoT general manager Stephen DiFranco said. "With our IoT connectivity products, Cypress will be able to provide the connectivity; the MCU, system-on-chip, module and memory technologies; and the mature developer ecosystem that IoT designers require, creating an end-to-end portfolio of embedded solutions and a single IoT design platform."
Broadcom will continue to focus on its wireless connectivity solutions for the access and mobility segments that are not IoT related, including serving set-top box, wireless access, smartphone, laptop and notebook customers, while Cypress will capitalize on the rapidly growing Wi-Fi and Bluetooth connectivity markets in consumer, industrial and automotive IoT segments.
"The robust, ready-to-scale WICED brand and developer network of module makers, value-added resellers (VARs), technology partners and ODMs who are already working with its technology will give us immediate revenue growth capability in new channels," Rodgers continued. "Cypress will continue to support and grow this network and to provide it with future generations of innovative, disruptive connected products. Cypress will also bring these new technologies to the automotive market, where we are already No. 3 worldwide in microcontrollers and memories, and where the connected car boom has just started."
Article translated by Jessie Shen
