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Infineon to acquire Cypress Semiconductor

Infineon Technologies is to acquire Cypress Semiconductor in a deal that values the US company at €9.0 billion.

According to Infineon this acquisition will strengthen its focus on structural growth drivers and enable it to serve a broader range of applications. Cypress has a broad portfolio of microcontrollers as well as software and connectivity components that are highly complementary to Infineon’s power semiconductors, sensors and security solutions.

Reinhard Ploss, CEO of Infineon, said: “The planned acquisition of Cypress is a landmark step in Infineon’s strategic development. We will strengthen and accelerate our profitable growth and put our business on a broader basis. With this transaction, we will be able to offer our customers the most comprehensive portfolio for linking the real with the digital world. This will open up additional growth potential in the automotive, industrial and Internet of Things sectors. This transaction also makes our business model even more resilient.”

Combining these technologies will enable both companies to develop high-growth applications such as electric drives, battery-powered devices and power supplies. It is also thought that the combination of Infineon’s security expertise and Cypress’s connectivity know-how will help to accelerate entry into new IoT applications in the industrial and consumer segments.

In automotive semiconductors, the expanded portfolio of microcontrollers and NOR flash memories will be able to support more advanced driver assistance systems and new electronic architectures in vehicles.

Commenting Hassane El-Khoury, President and CEO of Cypress, said: “The Cypress team is excited to join forces with Infineon to capitalise on the multi-billion dollar opportunities from the massive rise in connectivity and computing requirements of the next technology waves. Jointly, we will enable more secure, seamless connections, and provide more complete hardware and software sets to strengthen our customers’ products and technologies in their end markets. In addition, the strong fit of our two companies will bring enhanced opportunities for our customers and employees.”

With the addition of Cypress’s strong R&D and geographical presence in the U.S, Infineon not only strengthens its capabilities for its major customers in North America, but also in other important geographical regions. The company adds to its R&D presence in Silicon Valley and gains presence, as well as market share, in the strategically important Japanese market.

Infineon said that it would be looking to achieve significant economies of scale, making Infineon's business model even more resilient. Based on pro forma revenues, the transaction will make Infineon the number eight chip manufacturer in the world. In addition to its already leading position in power semiconductors and security controllers, Infineon will now also become the number one supplier of chips to the automotive market.

Author
Neil Tyler

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