DSP Group announced the acquisition of the Swiss SoundChip SA, a supplier of active noise cancellation (ANC) technology and engineering services. DSPG will pay $14.5 million in cash upon closing of the acquisition and up to an additional $6.0 million subject to the performance of certain business criteria. The transaction is projected to close in the third quarter of 2020. DSP Group expects to fund the transaction from existing cash.
DSPG from Herzliya, Near Tel Aviv, provides dedicated processors for voice, audio, video and data connectivity. The acquisition combines SoundChip’s capabilities in hybrid ANC with DSP’s SmartVoice low-power voice processing platform, which have recently been adopted by Google, Panasonic and Technics in their latest TWS headset models.
“The global pandemic has created extensive challenges for businesses and consumers worldwide, but it has also presenting new opportunities,” said Ofer Elyakim, CEO of DSP Group. “Major trends, including work from home, remote communications, and voice as a user interface, all emphasize the need for robust, integrated, and highly optimized state-of-the-art voice and connectivity solutions.”
According to a recently published iFixit teardown, DSP Group’s advanced SmartVoice solution is driving Google’s recently launched Pixel Buds 2. Earlier this year, Technics and Panasonic launched ANC-enabled TWS headsets based on a family of new advanced hybrid ANC codecs from DSP Group incorporating SoundChip’s patented Soundflex technology. The research firm Strategy Analytics forecast that the total market for TWS units is expected to grow from 170 million units in 2019 to 1.2 billion units by 2024, representing an $8 billion total addressable market (TAM) for companies such as DSPG.