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Dialog Semiconductor Agrees $500 Million US Chip Firm Buyout

Deal "substantially enhances our position in the Industrial IoT market"

By CBR Staff Writer

The UK’s Dialog Semiconductor has continued on its acquisitive spree, today agreeing to buy Californian chip maker Adesto Technologies for $500 million.

Adesto, founded in 2006, provides Arm-based System-on-Chips (SoCs), edge routers, network interfaces and resistive RAM technology memory, amongst other products that have a heavy focus on the Industrial Internet of Things (IIoT).

It delivers custom chips through GLOBALFOUNDRIES.

The deal comes four months after Dialog moved to acquire Germany’s Creative Chips GmbH – another fabless chip firm – for $80 million.

This new acquisition will be funded from Dialog’s balance sheet.

The move represents part of a push by Dialog to bolster its IIoT technology offering, and gives it access to over 5,000 of Adesto’s customers.

See also: UK’s Dialog Semiconductor Snaps Up German ASIC Specialist for $80 Million

“This acquisition substantially enhances our position in the Industrial IoT market,” said Jalal Bagherli, CEO of Dialog. “[The deal] complements and adds scale to our Industrial IoT portfolio from the recently acquired Creative Chips.”

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Further value lies in a synergy between the two companies’ product sets that will allow Dialog to enable full system solutions for wearables, hearables, and other IoT applications by combining Adesto’s low-power specialty memory products with Dialog’s BLE & Wi-Fi connectivity and True Wireless Stereo (TWS) Audio ICs” it said.

Adesto Technologies Boasts Recent Memory System Architecture Innovations

Among Adesto Technologies’ recent innovations is a system architecture that enables the execution of code directly from external serial flash memory. The company also designed a non-volatile memory type to serve the architecture.

As Bård M. Pederson, technology director for memory products at Adesto noted in a recent blog: “Several classes of embedded applications require large amounts of memory for executing either code or data. For example, some connected IoT nodes use wireless networking protocols that have large software stacks, while embedded AI and machine learning applications require large data sets.

In each case, these applications require more memory storage than will economically fit on a standard embedded chip and need, as a result, to be served by a form of flash memory specifically designed for high performance while maintaining the power efficiency of serial memory, the company claims. It designed its EcoXiP Octal xSPI non-volatile memory to help tackle this problem.

Pederson noted: “XiP increases design flexibility, as it allows the use of MCUs without internal flash memory, or with limited on-chip memory, to handle high performance processing. To design EcoXiP, Adesto had to overcome numerous technical challenges to transform basic serial flash memory into an energy-efficient external memory device that can act as high-performance random-access memory in XiP architectures.”

Dialog reported operating profit of $83.9 million in its last reported quarter. It may seem a bold move in the face of global chipmarkets roiled by Coronavirus, but Dialog (which won “Best Financially Managed Semiconductor Company” at the 2019 Global Semiconductor Alliance awards) clearly sees value.

The transaction is expected by Dialog to be earnings per share accretive within the first calendar year following close and deliver annual cost synergies of approximately $20 million within the first calendar year of close.

Adesto expects to report FY 2019 revenue of approximately $118 million.


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