NEW YORK — Atmel Corp. last week became the latest chip maker to reaffirm its commitment to the Internet of Things (IoT) sector, making another key investment to advance its strategy.
With its proposed $140 million cash deal to acquire Newport Media Inc. (NMI), the microcontroller maker will add two key products to complete its SmartConnect wireless portfolio: 802.11n WiFi and Bluetooth modules. According to Atmel's president and chief executive Steve Laub, the company has a strong position in the wireless chip sector, but it still needed the ability to offer all major WiFi standards to become a leading player.
"Winning in IoT requires a broad portfolio of high-performance, low-power, integrated, microcontroller-based connectivity solutions," Laub said in a conference call following the announcement of the deal. "We have been open about our desire to add Bluetooth to our portfolio."
The deal comes at a good time for Atmel, which is one of the founding members of the Open Interconnect Consortium (OIC), a group that was formed last week to create a specification to connect IoT devices to each other or to the cloud. (See IoT Group Defines Comms Spec.) Indeed, Atmel, in San Jose, Calif., identified the IoT sector's potential early-on and has made strategic acquisitions over the years to beef up its wireless offerings.
Through its acquisition of Ozmo Inc., of Palo Alto, Calif., in December 2012, Atmel added low-power WiFi, including a, b, and g bands, to its lineup -- 802.11.n WiFi provides higher performance and supports video streaming. In October 2011, it bought Advanced Digital Design S.A. of Spain, a maker of SoC solutions for powerline communications applications, including smart meters, energy management, and automation. Additional assets that Atmel has developed and acquired over time include ZigBee technology.
"NMI brings highly integrated, low-power WiFi and Bluetooth-certified combo products that will accelerate seamless communication and connectivity across wireless networks," said Laub. "The addition of NMI will also expedite introduction of Atmel's low-power Bluetooth products."
The NMI deal, which is expected to close in the third quarter of this year, may yield an additional earn-out payment of $30 million, if certain revenue goals are met in the next two years. NMI posted revenues of $43 million in 2013.
According to Will Strauss, an analyst at Forward Concepts, of Mesa, Ariz., NMI has been best-known for its mobile TV chips and, more recently, its connectivity chips. "They never knew that they were in the IoT market until now," he says.
He doubts Atmel is interested in pursuing the mobile TV market since it isn't very popular in North America and Europe, but in China and Japan. However, he recognizes the synergies between the two companies. "Atmel is in the home automation market [in IoT] based on its 802.15.4 wireless devices, and that ties in nicely with Newport Media's strengths."
In addition to the automation market, Atmel's low-power MCUs with NMI's 802.11n WiFi and Bluetooth-certified products will be targeted at industrial and consumer applications.
— Ismini Scouras is a freelance writer for EE Times.