Two multi-billion deals are set to impact the wireless industry as chipmakers become increasingly focused on the “Internet of Things.”
Qualcomm plans to invest up to $3 billion in a joint venture with Japan’s TDK Corporation to integrate RF front-end modules and filters into chipsets for mobile devices and other connected devices, including drones, robots and automobiles. The venture will be 51% owned by Qualcomm, which will have the option to buy TDK’s 49% stake two and a half years after the transaction closes.
In another multi-billion deal, Microchip has succeeded in its effort to acquire Atmel, outbidding Dialog Semiconductor. Last year Atmel accepted an offer to be acquired by Dialog in a cash-and-stock deal, but the value of that offer declined along with Dialog’s stock price in the months following the announcement. Microchip made a competing offer that included more cash. Now Atmel has agreed to merge with Microchip in a deal valued at $3.4 billion. That’s a lot less than Dialog’s original $4.6 billion offer, but more than the Dialog offer is worth today.
Both deals illustrate the value semiconductor makers see in IoT. Qualcomm said it plans to collaborate with TDK on sensor technology, evidence the chipmaker wants to invest in IoT endpoints as well as connectivity solutions. Microchip is already focused on IoT with its low-power embedded Wi-Fi and Bluetooth solutions, and the Atmel acquisition will give the company new expertise in microcontrollers for touch screens in user-controlled IoT devices. Atmel is also a maker of transceivers for IoT endpoints used in the Sigfox low-power wide area networks.
Qualcomm also sees its venture with TDK as a way to integrate more of the chips that power smartphones. The San Diego-based company said by adding more front-end components to its portfolio it will be able to offer more complete solutions to smartphone makers.
Qualcomm also noted the Singapore-based joint venture will work to develop wireless charging solutions. Wireless charging is set to become increasingly valuable to consumers and enterprises as more and more devices are connected to the Internet by wireless technology.
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