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Japan's Megachips eyes sensor hubs for IoT devices

Posted: 24 Nov 2014 ?? ?Print Version ?Bookmark and Share

Keywords:IoT? wearables? sensor hub? ASIC?

8 Reasons to get to know Megachips

1. Fast decisions, fast actions

If you've ever worked with a Japanese partner who takes forever to make decisions, hesitates to do anything new and different and, above all, hates taking risks, you'd be overjoyed with Megachips. That's the first reason to get to know the company.

Still run by the company's founders, Megachips is known for its decisiveness, ultra-fast actions, independent thinking and entrepreneurial passiontraits virtually nonexistent among most Japanese executives working in Japan's big IDMs. Look no further than how quickly Megachips made deals with a host of companies over the last 18 months.

Fast decisions

2. Shopping for growth

Second, at a time when many Japanese chip vendors are focused on retreat, cost-cutting and thinking small, a Japanese company dead-set on aggressive growth is a breath of fresh air.

Since April last year, Megachips, operating under everyone's radar, has been on a shopping spree.

Companies recently acquired by Megachips include Kawasaki Microelectronics and the DisplayPort business of STMicroelectronics. Megachips also made capital investment in Vidatronics Inc., a Texas-based fabless chip company offering leading-edge voltage regulation and power management, in order to gain access to its technology.

Megachips' Taiwan-based subsidiary acquired a majority of outstanding shares of Taiwan-based firm Modiotek.

The most recent acquisition of MEMS timing leader SiTime Corp. (Sunnyvale, Calif.) in October "completes my vision" for Megachips' transformation for now, Takata said.

In addition to the host of recent M&As, Takata has been quietly taking steps to set the company on a new course.

Takata told us: "Three years ago when I became Megachip's CEO, we had 275 employees with only a quarter of our revenues earned abroad. Today, our employees are tripled, sales are doubled and more than 40 per cent of our revenues are generated outside Japan."

However, it's hard to predict if Megachips' aggressive M&A will pay off. After all, the company's strategyits stated transition from custom ASICs to ASSPshas emerged out of necessity, since Japanese system companies are expected to become far fewer and smaller, compared to a growing number of system companies in the rest of Asia.

Some even worry that Megachips, which has grown up on familiar domestic turf where Japanese clients prefer working with Japanese chip companies, might not be ready for the quick transition to a global growth plan.

Further, Megachips' recent investments are all over the map. Some of the acquisitions look opportunistic, and it's hard to see a common thread that pieces everything together.

Takata disagrees. Each acquisition and capital investment will play a critical role for Megachips to go global and competitive in new technologies and products, he said.

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