Allegro buys magnetic sensing pioneer Crocus Technology

Allegro buys magnetic sensing pioneer Crocus Technology

Business news |
By Nick Flaherty

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Allegro MicroSystems is to buy magnetic sensing pioneer Crocus Technology in a cash deal worth $420 million.

The deal gives Allegro the unique Tunnel Magnetoresistance (TMR) sensing technology and products from Crocus Technology for e-mobility, clean energy and automation, supported by more than 200 patents. The magnetic sensing market is expected to increase to over $5 billion by 2030, with TMR representing the fastest-growing segment and expected to approach $1 billion in addressable market by 2030.

Automotive and industrial applications are expected to fuel TMR’s estimated 30% annual growth, which significantly exceeds the growth of the overall magnetic sensing market and maps to Allegro’s customers.

“Allegro has invested in TMR technology for the past decade, providing our customers with innovative and high-performing solutions enabling them to design products with optimal performance,” said Vineet Nargolwala, President and CEO of Allegro.

“We are seeing broader application of TMR technology as the megatrends of electrification and automation accelerate. This highly complementary acquisition aligns perfectly with Allegro’s growth initiatives and our focus on e-mobility, clean energy and automation.”

“In addition to accelerating our TMR roadmap and further strengthening our leadership in magnetic sensors, the acquisition will allow us to offer a broader and more differentiated product offering to benefit our customers.”

Crocus was a laboratory spin out in Grenoble, France, in 2004 developing Magnetic Logic Unit (MLU), a CMOS-based magnetic memory technology. It then also developed XtremeSense TMR advanced sensor technology that has higher sensitivity and lower power than Hall, AMR and GMR sensors and has shipped over 100m units through a partnership with Tower Semiconductor. The company is now headquartered in Milpitas, California, with the key R&D facility still in Grenoble.

“The Crocus team is excited to join Allegro and unite complementary expertise to create superior, highly differentiated customer solutions. By combining Crocus’s best-in-class advanced TMR technology with Allegro’s long-standing partnerships with leading automotive and industrial OEMs and tier-1’s, together, we expect to accelerate the adoption of TMR in targeted automotive and industrial markets,” said Zack Deiri, President and CEO of Crocus

The planned acquisition of Crocus will be funded with a combination of cash on hand and a new term loan. The transaction has been approved by the board of directors of both companies and is expected to close by the end of the year.;



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