Cypress Semiconductor said it will spend $550 million to acquire Broadcom's IoT business in the latest move centered on the burgeoning market of connected devices.
Broadcom's IoT division employs roughly 430 people worldwide and generated $189 million in revenue over the last 12 months. Under terms of the deal, Cypress will claim Broadcom's Wi-Fi, Bluetooth and ZigBee IoT product lines and intellectual property, as well as its WICED brand and developer ecosystem.
The Broadcom business also posted a loss of $104 million in its latest quarter.
Cypress, which also announced the departure of 68-year-old CEO T.J. Rodgers, said the acquisition will strengthen its position in key embedded systems markets including automotive and industrial, as well as in consumer segments like wearables and home automation.
"We are thrilled to be joining forces with Cypress to address the fast-growing IoT market," Broadcom IoT General Manager Stephen DiFranco said in a press release. "With our IoT connectivity products, Cypress will be able to provide the connectivity; the MCU, system-on-chip, module and memory technologies; and the mature developer ecosystem that IoT designers require, creating an end-to-end portfolio of embedded solutions and a single IoT design platform."
Broadcom said it will continue to focus on offering solutions for segments unrelated to the IoT including set-top boxes, smartphones and laptops. The deal is pending regulatory approval and expected to close in the third quarter of 2016.
The IoT is already proving compelling for chip vendors as growth in smartphone sales slows around the world. Intel last week said it will hone its focus on the IoT as it slashes as many as 12,000 jobs in a major restructuring effort. And Qualcomm earlier this year said it would team with Intel to address the ever-growing problem of fragmentation in the IoT.
Meanwhile, Cisco announced a $1.4 billion deal in January to acquire Jasper to pursue the IoT. AT&T earlier this week trumpeted two new customer agreements to provide IoT services, and Verizon recently boasted of its presence in the market, saying "IoT is now mainstream."
- see this press release
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