LONDON – FPGA company Lattice Semiconductor Corp. has announced it plans to acquire SiliconBlue Technologies Inc., a startup that has specialized in low-power FPGAs, for $62 million in cash.
Kapil Shankar, SiliconBlue's CEO, will join Lattice (Hillsboro, Oregon) as corporate vice president of the mobility business unit and will be responsible for the company's mobility product lines.
SiliconBlue (Santa Clara, Calif.) was founded in 2005 and has raised in excess of $57 million in venture capital since then. The company’s mobile FPGA devices have already shipped in the millions of units to top tier consumer OEMs, Lattice said.
The low-power FPGAs have been used to enable mobile designers to add features to their mobile platform late in the product development cycle, including connectivity, sensor management, video and imaging processing.
The acquisition is subject to standard closing conditions and is expected to close in the fourth quarter of 2011. Lattice Semiconductor ended the third quarter of 2011 with a cash, cash equivalents and short-term marketable securities balance of $267.2 million.
"The acquisition of SiliconBlue is aligned with our strategic long range plan and will help accelerate our growth strategy in the mobile consumer market," said Darin Billerbeck, Lattice CEO, in a statement. "Silicon Blue will further strengthen our product roadmap by adding a scalable, low cost, low power non-volatile memory FPGA, along with key personnel and blue chip customers."
Shankar said: "We think our existing customers will immediately benefit from our new global reach and support. We also expect Lattice's added resources and financial strength will give potential new customers confidence in designing in our mobileFPGA solutions as we work to more fully realize the potential of our pioneering technology."
The mobile consumer market for programmable logic includes digital cameras, smartphones, eReaders, tablets, notebooks and netbooks.
This looks like a good deal for Lattice. Other than the product, SB has a lot of great FPGA veterans on staff.
I agree with the comment that the math doesn't appear to work out for the VCs, but I do not think we know the full story here.
SB had two fundamental issues, 1) being a startup, and 2) socket life. Lattice solved #1 but in doing so inherited the socket life issue.
SB's niche FPGA business survives mainly on getting designed in (ie., socket wins) to high-volume products such as cell phones. Because cell phones have a short life cycle there's frequent opportunity for a device to get designed out. SB's FPGAs are typically targeted for a 'design out' because the functionality they provide usually gets pulled into a custom chip. In other words, SB FPGAs are a good temporary solution to time-to-market.
Once their investers started to understand the nature of the beast I suppose Lattice started looking like an extension to writing on the wall, and good exit strategy for execs with stock options.
Good point. I had forgotten that that was the total. In view of this, an interesting transaction. Perhaps SiliconBlue simply believed they had reached the limits of what they could accomplish as a small, independent startup.
Perhaps someone more skilled than me in such matters as this can explain how the VCs allowed this to happen. Do the math: someone is going to get disappointed, either the VCs or the staff, considering the offer is not even $5M more than the funding according to my math.
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