Cash-strapped analog and power management chip startup Touchstone Semiconductor has sold all of its assets to Silicon Laboratories Inc., the embedded processor vendor gunning for a dominant position in the Internet of Things (IoT) sector.
In a $1.5 million deal, Silicon Labs will gain nearly 70 analog products -- including op-amps, current sense amplifiers, low-power analog-to-digital converters (ADCs), comparators, power management ICs, timers, and voltage detectors and references -- all of which will enable designers to reduce power in battery-operated systems tailored for the IoT.
"These low-power analog components are very complementary to the existing solution that we have and allow us to sell more products into IoT applications," Silicon Lab's chief product officer, Dave Bresemann, told EE Times, adding that the company already serves this burgeoning market with low-power MCUs, wireless products that connect those MCUs, as well as sensors and software for mesh networking. "It's well aligned with the low-power strategy we already have with the Internet of Things."
Silicon Labs began beefing up its product portfolio to pursue the IoT when it acquired Boston-based Ember, a manufacturer of ZigBee-based wireless networks, for $72 million in May 2012 and a year later purchased European 32-bit MCU maker, Energy Micro AS, for approximately $170 million.
"This is a continuation of a strategy that we've been executing on for a couple of years now," said Bresemann, who added that the company has all of the "key pieces" to successfully advance its IoT strategy. "We are feeling good about the solution."
For Touchstone Semiconductor, the deal puts a nail in the coffin for what appeared to be a promising analog and power management chip supplier. The fabless company, based in Milpitas, Calif., launched in 2010 with $12 million in backing from Silicon Valley venture capital firms Opus Capital and Khosla Ventures. Its chief executive, Brett Fox, told EE Times in July 2012 that his vision was to "go after anything and everything in the signal path" and insisted that the company wasn't started so that its founders could "flip it."
However, Touchstone Semiconductor "ran out of money," Bresemann said. Silicon Labs already had "some engagement with the company," so it understood its business. In addition to Touchstone's product lines, Silicon Labs will also gain a handful of patents, as well as a "portion" of Touchstone Semiconductor's team; however, Brett Fox will not be joining the company, he said.
Bresemann wouldn't say whether the deal would be accretive to its bottom line this year, as the revenue base for the products is small. "But obviously we acquired the products because we think they are very promising."
Silicon Labs capped off 2013 with a record $580.1 million in revenue, compared with $563.3 million in 2012.
Analysts reacted positively to the deal.
"We are encouraged by this opportunistic asset purchase as Touchstone's high-performance, low-power portfolio is complementary to Silicon Labs' existing embedded portfolio," wrote Tore Svanberg, an analyst with Stifel Nicolaus, San Francisco, in a note to investors.
— Ismini Scouras is a freelance writer for EE Times.