FPGA firm Achronix to go public via SPAC

FPGA firm Achronix to go public via SPAC

Business news |
By Peter Clarke

The vehicle that will take Achronix (Santa Clara, Calif.) public is ACE Convergence Acquisition Corp., which was founded and joined Nasdaq in 2020. The Cayman Islands registered company is led by CEO and chairman by Behrooz Abdi, formerly head of the MEMS division of TDK and before that CEO of MEMS vendor InvenSense Corp.

Achronix and ACE have agreed a deal that would see the combined entity named Achronix Semiconductor Corp. listed under the ticker symbol ACHX with a combined enterprise value of US$2.1 billion.

With the sale of Altera to Intel and Xilinx to AMD, Achronix becomes the leading independent FPGA vendor and embedded FPGA intellectual property licensor. Achronix addresses the data acceleration market, which is growing strongly.

Achronix said there would be no changes to the senior management with Robert Blake continuing as CEO.

Achronix was founded in New York in 2004 having licensed patents from Cornell University. In 2008 Achronix announced FPGAs that operate at clock frequencies up to 1.5-GHz and then became Intel’s foundry customer in 2010. The company partnered with foundry TSMC in 2016 and also started offering its IP for license.

“To date, this licensing business with TSMC has shipped 10 million cores, while our chip business has secured over $400 million in production orders,” said John Lofton Holt, the founder and chairman of Achronix, in a conference call to announce the deal with ACE.

Next: Great expectations

Achronix is expected to have revenues in 2020 of $105 million with earnings before income tax (EBIT) margin of 35 percent. The company expects that on average about 70 percent of revenue will come from Speedster FPGA products and 30 percent of revenue from Speedcore IP licensing.

In a presentation, the companies predicted Achronix would enjoy 30 percent CAGR revenue growth through to 2023 with a mix of sales by sector being 48 percent into the Data Center, and 34 percent into networking. The remainder would be a mix of test and measurement, automotive and other.

The transaction is expected to close by the end of the 1H21.

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