IXYS Corporation has executed a definitive agreement with Samsung Electronics to acquire Samsung’s 4-/8-bit microcontroller business for approximately $50 million. As part of the agreement, IXYS will receive nearly 80 products, inventories, intellectual property and other assets exclusively related to the 4-/8-bit business. The acquisition is subject to various customary closing conditions and is expected to be completed within four weeks from the date of signing of the definitive agreement. The net impact is expected to be accretive for IXYS in the fiscal year ending March 31, 2014.
"This acquisition provides increased revenues for our higher gross margin IC business, which includes our wholly-owned subsidiaries, IXYS IC Division and Zilog, a pioneer supplier ofmicrocontrollers," said Dr. Nathan Zommer, Chairman and CEO of IXYS. "We plan to gain market share for our MCU and IC products, and expand our customer base in industrial, medical and consumer applications. The 4-/8-bit products fit with our mixed signal ICs and our power semiconductors, whereby we will be able to offer our customers complete solutions for power management -- from the digital control analog driver ICs to higher power devices. The development of this product portfolio has been a strategic decision as part of our ‘World of IXYS’ marketing and sales initiative.”
“Furthermore, with this agreement we expand our foundry relationship with Samsung. We have been strategic partners with Samsung Electronics for more than 25 years, and are looking forward to expanding this business affiliation. Given that some of these MCUs were based originally on Zilog’s legendary cores, we expect a seamless transition for the customer base and a quick integration within our Zilog MCU lines,” noted Dr. Zommer.
"We have executed a management decision based on the focus on mobile solutions that we are taking in our semiconductor business," said Dr. Ben Suh, Senior Vice President of Samsung Electronics System LSI Strategic Planning team. “We are confident that IXYS will embrace the microcontroller initiatives started by Samsung and continue to generate new products into this important market.”
According to recent research, the 4-/8-bit microcontroller segment is forecast to reach nearly $3.5 billion in 2013, with shipments of MCUs growing to 6.7 billion units. By some estimates, 4-/8-bit MCUs are expected to account for 23% of microcontroller sales in 2017.
Current 4-/8-bit products to be acquired by IXYS include MCUs for remote controllers, ultra-low power MCUs and a series of products for home appliances, consumer electronics and LCD displays. Applications include battery chargers, thermostats, boiler control, microwaves, e-bikes, LED lighting, power meters, blood pressure meters and smoke detectors.
"The products that we are gaining with Samsung’s 4-/8-bit business are complementary to IXYS' current IC/MCU business, and therefore we see positive synergies going forward," said Uzi Sasson, President and CFO for IXYS. "This acquisition provides us with greater critical mass in product volumes, the potential for better financial performance and diversification of revenue, all of which can enhance our global position and growth initiatives in the microcontroller market.
In addition to bolstering IXYS’ product portfolio, this transaction highlights the strong cooperative relationship with Samsung. We are excited about our ability to continue working and partnering with the Samsung team.”