To grow in IoT, Cypress and Spansion plan $US4 billion chip merger

After merging, Cypress and Spansion will target the growing IoT market

The contraction of the semiconductor industry continued with embedded chip and flash memory makers Cypress Semiconductor and Spansion announcing a merger plan worth $4 billion.

Both companies make flash memory and low-power circuits used in industrial equipment, medical instruments, smart devices and cars. For example, Spansion's microcontroller units are used in automotive braking systems.

The merger makes sense with fast growth in the Internet of Things market, where industrial equipment with connectivity features could put the companies' products in high demand, said Jim McGregor, principal analyst at Tirias Research.

The combined company could go after markets like industrial automation, smart cities and smart devices, McGregor said.

"Those are markets where you can carve out a niche without taking on the Qualcomms and Intels," McGregor said. "I still see them as being a niche entity, but they are looking at intellectual property that will make them valuable."

The combined company will have in-house wireless capabilities, which are key for data transfer between IoT devices. Both the companies also specialize in NOR and SRAM memory, which are used in industrial IoT equipment.

"Having the memory capability in-house is going to be a potential benefit," McGregor said. "We have only a handful of memory manufacturers left."

Spansion, which was a spin-off of Advanced Micro Devices, last year bought Fujitsu's microcontroller business and is doing interesting work in energy harvesting.

The combined company will compete with Freescale, Atmel, STMicroelectronics and Texas Instruments. Freescale has in-house memory assets, while TI has a strong portfolio in analog and digital circuitry.

Both companies are based in Silicon Valley. They say the merger could create a company with $2 billion in annual revenue. The deal will close in the first half of next year, the companies said in a joint statement.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsbusiness issuesmemoryComponentsSpansionCypress Semiconductor

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

PC World Evaluation Team Review - MSI GT75 TITAN

"I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it."

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?