Synaptics Incorporated announced the acquisition of DSP Group, Inc. in a $ 450 million deal that the company says will bring new voice and wireless capabilities to its IoT product portfolio. Synaptics’ state-of-the-art artificial intelligence platform has targeted the uses of voice and facial biometrics on the device, and the addition of ultra-low power networking capabilities in these products will make them more appealing to consumers. customers in security and other markets, according to executives at Synaptics.
DSP Group has a portfolio of 235 patents and leading positions in several IoT markets such as low power “SmartVoice” (ie the market for smart devices like Alexa), communications / unified collaboration and wireless IoT devices, according to Michael Hurlston, president and CEO of Synaptics, who spoke on a call detailing the acquisition strategy. Hurlston noted that there is an overlap with Synaptics’ existing customer base, which strengthens the strategy of cross-selling devices and chip solutions.
DSP Group is not a household name, but many of its chips are found in cordless phone handsets used in consumer households. This wireless technology, Digital Enhanced Cordless Telecommunications (DECT) has evolved to encompass other uses such as home automation and security, and air conditioning systems with the development of the ULE (Ultra Low Energy) standard.
The ULE market is one of the synergies between DSP Group and Synaptics; Executives believe that adding video capabilities to ULE-enabled devices will provide new growth opportunities. The security market, in particular, is expected to present opportunities as customers will be more confident in purchasing chips from the combined companies, according to Hurlston of Synaptics. Synaptics reported revenue of $ 1.34 billion in fiscal 2020, while the DSP Group achieved annualized revenue of $ 143 million.
Synaptics is also looking to add more wireless capability to its recently announced “Low Power Edge AI” initiative, which opens up a $ 2 billion addressable market opportunity, Hurlston noted. Katana battery-powered smart vision platform targets uses such as on-device facial and voice biometrics for smart home applications in consumer markets, as well as security, inventory tracking and other applications in the industrial and corporate markets.
“We continue to invest in technologies that orient our product line towards IoT applications,” Hurlston said in a prepared statement. “The expertise of the DSP group in SmartVoice and ULE wireless solutions, combined with Synaptics’ leadership position in far-field voice recognition and IoT-oriented Wi-Fi / BT combos, allows us to provide more and more solutions. more differentiated to our combined customer base, while positioning ourselves as a leader in the transition to AI-enabled devices at the edge of the network. “
Synaptics cited ABI Research as predicting approximately 2.5 billion TinyML units for sale by 2030. TinyML refers to machine learning algorithms optimized for on-device analytics. Hurlston cited the possibility of combining Katana with wireless capabilities on a single module as an offering that would accelerate sales of the company’s technology.
Engineering and other resources are also key to the deal, with DSP Group having around 738 employees, according to the company’s LinkedIn page. Synaptics wants to direct some of its engineers to the development of next generation wireless technologies such as WiFi 7 for the IoT market.
Synaptics has priced the deal at $ 22.00 per DSP Group share in an all-cash transaction. The transaction is expected to be funded through a combination of cash on hand and a debt financing arrangement. The deal is expected to be concluded by the end of the 2021 calendar.
acquisitions | AI chips | biometrics | biometrics at the edge | Cutting-edge AI | IoT | actions | Synaptic | wireless