MADISON, Wis. — If you haven't heard of Japan's MegaChips Corp., you'd better watch out. Japan's fast-growing fabless chip company may come knocking on your door, just as it did to SiTime Corp., a Sunnyvale, Calif.-based MEMS and analog fabless vendor.
The two companies announced on Tuesday, October 28, a definitive agreement under which Osaka-based MegaChips will acquire SiTime, a leader in the MEMS timing market for $200 million in cash.
The deal marks the largest acquisition of a venture-backed semiconductor company in 2014, according to SiTime.
Describing MegaChips as "truly entrepreneurial, innovative and responsive," Piyush Sevalia, SiTime's executive vice president of marketing, told us, "Everyone in our company is really excited about this deal." It was MegaChips "who found us," and initiated discussions, said Sevalia.
MegaChips, which develops SoCs and application-specific standard products that go into networking devices, gaming and digital cameras, have recently gotten into the development of sensor hubs and sub-GHz wireless technology. SiTime sees its own MEMS timing device product line as a natural fit for MegaChips' product portfolio for wearable and handheld devices.
Without divulging details, Sevalia said, "We've been pleased to find out that MegaChips' roadmap for the next six to nine months are very well aligned with ours."
MegaChips, founded in 1990, have been steadily gaining reputation as a rising star in Japan, especially over the last several years. While growing the company organically, it's been also engaged in a series of M&A activities. In 2012, MegaChips acquired 100 percent stake in Kawasaki Microelectronics, Inc.
MegaChips is Japan's only chip company to make the cut among the top 25 fabless chip companies listed by IC Insights. The company has worldwide revenues of more than $600 million.
Fabless Chip Companies Ranked by 2013 Sales
(Source: IC Insights)
The rise of MegaChips marks a sharp contrast to many leading Japanese integrated device manufacturers who have struggled with the transition to fab-lite operations as they've lost momentum through poorly executed consolidations.
SiTime, obviously, isn't alone in the MEMS oscillator business. Its competitors in MEMS timing include Discera which was acquired by Micrel at the end of August, Silicon Labs, and several others.One of the biggest stories in the MEMS market in recent years is consolidation.