DSPG to Acquire SoundChip for $20.5 Million

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.


Deutsche Telekom Selected DSPG chip for Smart Speaker

Deutsche Telekom is developing a smart speaker with two-way HD voice, to support hands-free calling from the speaker. The new device will employ the DECT/ULE communication protocol and HD voice processor based on a chip produced by DSP Group from Herzliya, near Tel Aviv. Industry sources estimated the deal can reach a total of $50 million sales to DT. This is an important boost to DSPG, whose smart home sales declined 27% in Q2 2018.

DT said that two way voice use cases are taking center stage as an innovative application of HD voice technology, paving the way for other voice-enabled smart home applications. “DECT and ULE technologies are the only ones on the market built specifically for voice applications,” said Ofer Elyakim, CEO of DSP Group. “We have spent the last 20 years perfecting our SoC solutions to offer superior customer experiences and enabling leading OEM and service providers’ to deliver innovative smart home products.”

DT beleives that the emergence of voice enabled devices and two-way voice interaction, voice in the smart home will become the interface-of-choice and DECT/ULE is gaining ground as the go-to wireless standard for applications requiring high-quality voice. “With the ability to leverage DSP Group’s HD voice solution in our Smart Speaker to make high quality voice calls with all the benefits of DECT gives us a competitive advantage,” commented Bernd Müller, Lead Product Manager for Smart Speaker at Deutsche Telekom.

Today, this market is dominated mainly by Apple, Amazon and Google. Deutsche Telekom’s announcement indicates that a new copetitor is entering this emerging market.