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Why Silicon Labs wants to sell its analog chip business

The semiconductor industry’s consolidation wave has analog written all over it and the Bloomberg News report about Silicon Labs selling its analog chip business is a testament to this analog design disruption. According to this report, the Austin, Texas-based chipmaker is working with a financial advisor to sell its analog assets.

The immediate reaction to this news points toward Silicon Labs’ focus on the Internet of Things (IoT) connectivity business, which drives nearly 60% of company revenues. However, it’s worth noting that the chipmaker has a significantly large analog operation. The Bloomberg report projects that the company’s analog chip business could be worth $2 billion to $3 billion or more.

Silicon Labs’ analog chip business can be segmented into two broad categories: timing and isolation. The timing portfolio includes buffers, clock generators, oscillators, and jitter attenuators. Likewise, the isolation lineup comprises isolated analog-to-digital converters (ADCs) and gate drivers as well as industrial I/O and digital isolators.

Figure 1 The AEC-Q100 certified timing portfolio includes clock generators, clock buffers, PCIe clocks, PCIe buffers, and synthesizers. Source: Silicon Labs

Just last month, Silicon Labs announced it was expanding its automotive timing portfolio by incorporating the SmartClock technology features into its Si5332-AM clock generators (Figure 1). The SmartClock technology actively monitors reference clocks to detect potential faults and provides built-in clock redundancy.

Then, earlier this month, Silicon Labs unveiled an all-in-one isolation solution for Wolfspeed’s recently launched WolfPACK power module. The Si823Hx gate driver board features the Si823Hx isolated gate driver and Si88xx digital isolator with an integrated DC/DC converter in a compact design (Figure 2).

Figure 2 Silicon Labs’ isolated gate driver technology is targeted at a variety of power applications such as high-power converters and inverters, motor and traction drives, and electric vehicle (EV) chargers. Source: Silicon Labs

The two recent announcements demonstrate the company’s commitment to its analog business. So, why it’s selling the analog chip unit? First and foremost, IoT connectivity does offer a huge promise, and Silicon Labs has probably figured out that it’s about time to have a laser-sharp focus on this rapidly emerging market. The IoT security alone could shape into a full-fledged segment.

Second, analog assets are hot in the merger and acquisition (M&A) game, as demonstrated by the recent acquisitions of IDT and Dialog Semiconductor by Renesas. Therefore, Silicon Labs may want to take advantage of this consolidation wave and shed off its analog assets that no longer seem to be a strategic part of its product focus.

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