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Microcontroller and mixed-signal analog IC vendor Microchip Technology Inc. has agreed to acquire Novocell Semiconductor Inc. to bolster its offerings in the memory semiconductor market. The acquisition will operate as a subsidiary of Silicon Storage Technology, another Microchip business unit.
The acquisition is expected to close later this month and comes on the wake of surprisingly strong sales and margins improvements at Microchip, which on Monday jacked up its forecast for the fiscal 2014 first quarter ending June 30. Steve Sanghi, president and CEO, attributed this to improvements in the business environment and “strong bookings.” In response, Microchip said it plans to “return our employees to full time work” and added it is ramping both front and back-end operations “to meet the needs of our customers.”
The Novocell acquisition adds a range of non-volatile memory IP solutions to Microchip’s product offerings and gives it the opportunity to widen the package to current and new customers. The transaction is also seen adding to SST’s current offerings, giving it additional penetration into the memory market.
“This acquisition provides our customers with valuable and differentiated technology and helps us to enable their designs with an even more comprehensive set of solutions, expanding our position as a leading memory IP supplier,” said Mark Reiten, vice president of Technology Licensing for SST.
Microchip in 2010 fought a hard war to purchase SST and had to wrestle the company away from another contender. The SST acquisition was part of the company’s strategy of expanding into new product areas and the Novocell transaction builds on this goal. In 2012, Microchip acquired Standard Microsystems Corp.
