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.
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.