Rambus has acquired the assets of Semtech’s Snowbush IP for $32.5 million as well as additional payments based upon specific new product sales through the end of 2022.
Snowbush IP, formerly part of Semtech’s Systems Innovation Group, offers silicon-proven, high-performance serial link solutions. More specifically, the company has a long history of providing advanced analog and mixed-signal IP for ASSP, ASIC, and SoCs. The platform architectures developed for advanced SerDes products, along with high-speed IP cores, facilitates cost savings opportunities and can expand the Rambus product offerings by integrating industry-leading IP cores, patents and other assets.
According to Rambus CEO Ron Black, the acquisition bolsters Rambus’ position in high-growth spaces and meets customer needs in the server, networking and data center markets.
“Our strategy is to look for opportunities in critical segments that will enhance our roadmap, especially in ways that will propel growth in profitable markets,” said Dr. Ron Black, president and chief executive officer at Rambus. “By adding Snowbush IP into our portfolio, we are bolstering our SerDes business and accelerating our product position. This acquisition, along with our memory IP cores and chip business, will further build upon the existing product opportunities and expand our foundry partnerships.”
As Black emphasizes, the acquisition is a strategic one, as Rambus believes the combination of its strong SerDes expertise, coupled with that of the Snowbush team, makes the company a true leader in the space.
“It will not only accelerate our collective roadmaps, but our growth and profitability as well,” he said. “As a reminder, SerDes technology is key to networking and the data center.”
In addition to the SerDes IP, the acquisition includes a nearly complete design of a particular chip developed with a large key customer.
“While we will be keeping this program in stealth mode for the time being, what I can tell you is that the device has business characteristics similar to those of our buffer chip – a focused customer set, high gross margins, and ability to differentiate further over time,” Black added. “The total available market, or TAM, for this device is estimated by industry sources to be $220M today, growing to $300M by 2021. We believe that this device, in conjunction with our buffer chip, can add significant revenue and profit starting in 2018.”
Another advantage of the acquisition, says Black, is that it expands Rambus’ strategic foundry partnerships, which are important for a fabless chip and semiconductor IP provider.
It should be noted that the acquisition remains subject to customary closing conditions and is expected to close during the third quarter of 2016. These acquired technologies will be part of the Rambus Memory and Interfaces Division, with Rambus expecting this acquisition to be accretive within 18-24 months.