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MegaChips to acquire MEMS timing leader SiTime

Posted: 30 Oct 2014 ?? ?Print Version ?Bookmark and Share

Keywords:acquisition? MEMS? MegaChips? SiTime?

MegaChips Corp. is plunking down $200 million in cash to buy SiTime Corp., a California-based MEMS and analogue fabless vendor. The deal marks the largest acquisition of a venture-backed semiconductor company in 2014, according to SiTime.

Describing MegaChips as "truly entrepreneurial, innovative and responsive," Piyush Sevalia, SiTime's executive vice president of marketing, told EE Times, "Everyone in our company is really excited about this deal." It was MegaChips "who found us," and initiated discussions, said Piyush.

Osaka-based MegaChips, which develops SoCs and application-specific standard products that go into networking devices, gaming and digital cameras, have recently gotten into the development of sensor hubs and sub-GHz wireless technology. SiTime sees its own MEMS timing device product line as a natural fit for MegaChips' product portfolio for wearable and handheld devices.

Without divulging details, Piyush said, "We've been pleased to find out that MegaChips' roadmap for the next six to nine months are very well aligned with ours."

MegaChips, founded in 1990 as a division of Kawasaki Steel, have been steadily gaining reputation as a rising star in Japan, especially over the last several years. MegaChips is Japan's only chip company to make the cut among the top 25 fabless chip companies listed by IC Insights. The company has worldwide revenues of more than $600 million. (See: Asian firms top fabless IC vendor ranking)

Top fabless IC suppliers

Fabless Chip Companies Ranked by 2013 Sales (Source: IC Insights)

The rise of MegaChips marks a sharp contrast to many leading Japanese integrated device manufacturers who have struggled with the transition to fab-lite operations as they've lost momentum through poorly executed consolidations.

Why SiTime?

SiTime, obviously, isn't alone in the MEMS oscillator business. Its competitors in MEMS timing include Discera which was acquired by Micrel at the end of August, IDT, Silicon Labs, and several others.

One of the biggest stories in the MEMS market in recent years is consolidation.

Tony Massimini, chief of technology at Semico Research, noted such M&A examples in MEMS market as VTI Technologies bought by Murata, InvenSense's acquisition of ADI's microphone business and Movea.

"A company can spend three to four years to develop a MEMS technology or it can get into the market right away via an acquisition," said Massimini. The MegaChips deal seems to be a case of the latter.

But, really, how fast is the MEMS timing market growing and how big a market share does s have?

Semico's Massimini estimated the MEMS timing market at about $120 million in 2014. He predicts that by 2017 it will reach $466 million.

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