MegaChips Acquires SiTime: Another Boost for IoT & Good for Analog

MegaChips is a Japanese fabless semiconductor company that has the foresight to value the Internet of Things (IoT) market as a huge opportunity coming faster than most people think. In a move to bolster its position in this and other markets, it acquired SiTime, a MEMS and analog fabless semiconductor company. The two companies are quite complementary in their views, and this acquisition, in my estimation, is quite good for the analog industry as a whole.

On the MegaChips website, the company philosophy reads in part:

    Looking ahead, MegaChips will innovate to respond to market change and will continue to offer solutions to resolve the issues that our customers confront. In doing so, we will continue to earn the trust of our corporate customers and create more appealing solutions that will help them expand their LSI and systems business.

The company has certainly lived up to this statement by acquiring SiTime, whose MEMS technology in timing devices, especially in the coming wave of the IoT, will ultimately replace quartz crystal timing solutions to improve upon the size, accuracy, and power of such critical devices in that market (see Figure 1). SiTime’s 80% market share in MEMS timing devices is a win for MegaChips since it makes it a leader in that market now. And the benefit to SiTime is the backing of MegaChip’s revenue of $600 million, which will certainly raise SiTime to a higher level of stability and visibility, especially to many of the larger customers in the industry.

Figure 1

SiTime is unique in the industry in that it can provide timing solutions that can easily be integrated into an SoC.

SiTime is unique in the industry in that it can provide timing solutions that can easily be integrated into an SoC.

MegaChips is among the top 25 fabless semiconductor companys and has a complementary business that fits SiTime well in the wearables, mobile, and IoT markets. The combination will certainly gain the attention of procurement people in the industry and help it gain more positions as a preferred supplier, especially with MegaChips' aggressive growth strategy, with a vision to become one of the top 10 fabless semiconductor companies through both organic growth and strategic acquisitions. In this case, action is speaking louder than words

I spoke to SiTime’s Piyush Sevalia, executive VP of marketing, who told me that the two companies have a close culture match, which will certainly ease the acquisition as well as strengthen both companies as they move forward in new future developments together.

With MegaChip’s larger sales force and the acquisition creating a larger revenue company, bigger customers will tend to gravitate towards them for new solutions as well. This acquisition will also improve the company’s strength and position with the outside foundries they use.

I am looking to see some strong new introductions in 2015 as a result of this acquisition, especially in wearables and the IoT. And I fully expect to see more strategic acquisitions from MegaChip.

SiTime will retain its name and operate as a wholly owned subsidiary of MegaChips.

For more details visit the MegaChips website.

9 comments on “MegaChips Acquires SiTime: Another Boost for IoT & Good for Analog

  1. bjcoppa
    November 4, 2014

    More and more consolidation is happening across the greater microelectronics industry as technology costs increase and competition stiffens. The electronic device world is becoming more centralized from the wireless and communications providers on down to the component level. Just look at Sprint and T-mobile + how TSMC is making chips for an increasing # of fabless companies.

  2. Steve Taranovich
    November 4, 2014

    @analoging—It certainly is a big trend over the last ten years or so

  3. Davidled
    November 5, 2014

    I am wondering how consolidation affects the engineering job market. It is going to be more tough  every year, as many job role would be consolidated every sector.

  4. bjcoppa
    November 5, 2014

    The MEMS supply chain is more fragmented than the IC industry. Also MEMS typically have lower margins than middle to leading edge ICs and optoelectronics. Thus, there is less room for error from a business model perspective. A more centralized MEMS market may actually help the overall industry in developing more common roadmaps.

  5. bjcoppa
    November 5, 2014

    For anyone interested, Steve Taranovich, and myself, Brian Coppa, will be attending the MIG sponsored MEMS Executive Congress in Scottsdale, AZ this week, November 6-7, 2014: Many of the top industry professionals in the field will be presenting. I will be publishing some of the highlights in my column: You can click the “Subscribe” button in the page link listed to ensure you receive the email alert once it is published. 

  6. Steve Taranovich
    November 5, 2014

    @analoging—Thanks for letting our audience know about our attendance at the MEMS Executive Congress Brian. Brian and I look forward to seeing lots of readers there as well.

  7. Netcrawl
    November 5, 2014

    @Steve great post! @Analoging I agree with you, MEMS is an especially fragmented sector. MEMS is inherently at the intersection of several engineering disciplines, not just electronic engineering but also mechanical engineering. Beyond that, MEMS devices are frequently designed for real-world sensor applications requiring reference to fields such as materials science and environmental engineering, and more recently, the advent of concepts such as the lab-on-a-chip has brought the technology into increasing contact with the world of biology. MEMS is arguably the poster child for the trend multi-displinary systems.

  8. Netcrawl
    November 5, 2014

    @Analoging thanks for sharing this information, that's great! 

  9. Netcrawl
    November 5, 2014

    @Analoging its the largest acquisition of a venture-backed semiconductor company for this year, with this acquisition, MegaChips has becomes a clear leader in MEMS space. Its a smart move for MegaChips, SiTime's innovative MEMS timing solutions replace dated quartz products in the telecom, networking, computing, storage and consumer electronics market, with the benefits of higher perfprmance, smaller and low power.

    MEMS are fuelling the growth of the semiconductor industry, through this acquisition, MegaChips becomes the leader of the “MEMS packs”, SiTime technology is the perfect match for MegaChips solutions that target wearables, mobile and IoT market.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.