Infineon to swallow Cypress in a move to expand product portfolio

June 03, 2019 //By Christoph Hammerschmidt
Infineon to swallow Cypress in a move to expand product portfolio
Chip manufacturer Infineon intends to acquire Cypress Semiconductor. The strategic move will enable Infineon to offer the "most comprehensive portfolio for connecting the real world with the digital world," said Infineon CEO Reinhard Ploss. The company sees great potential for additional sales in the target markets of automotive, industry and Internet of Things. Infineon will pay approximately €9.0 billion for the acquisition.

According to Ploss,the planned acquisition will put Infineon’s business on a broader basis. “This transaction also makes our business model even more resilient”, Ploss said.

With the addition of Cypress, Infineon will consequently be able to strengthen its focus on structural growth drivers and serve a broader range of applications. Cypress has a differentiated portfolio of microcontrollers as well as software and connectivity components that are regarded as highly complementary to Infineon’s power semiconductors, sensors and security solutions. Combining these technology assets will enable comprehensive advanced solutions for high-growth applications such as electric drives, battery-powered devices and power supplies. “The combination of Infineon’s security expertise and Cypress’s connectivity know-how will accelerate entry into new IoT applications in the industrial and consumer segments,” Infineon said in a press release. In automotive semiconductors, the expanded portfolio of microcontrollers and NOR flash memories is expected to offer significant potential, especially in light of their growing importance for advanced driver assistance systems and new electronic architectures in vehicles. 

With the addition of Cypress’s strong R&D and geographical presence in the U.S, Infineon not only strengthens its capabilities for its major customers in North America, but also in other important geographical regions. The company adds to its R&D presence in Silicon Valley and gains presence, as well as market share, in the strategically important Japanese market. At the same time, Infineon aims to achieve significant economies of scale, making its business model more resilient. Based on pro forma revenues of €10 billion in FY 2018, the transaction will make Infineon the number eight chip manufacturer in the world. In addition to its strong position in power semiconductors and security controllers, the Bavarian chipmaker believes that he will now also become the number one supplier of chips to the automotive market.   

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