In search of new markets, CEVA to Acquire Intrinsix

11 May, 2021

Will pay approximately $33 million in cash. Wertheizer: "This combination creates a powerful entity with a strong IP portfolio and advanced chip design capabilities"

Above: Gideon Wertheizer, CEO of CEVA

CEVA (NASDAQ: CEVA), the licensor of IP for DSPs, wireless connectivity and smart sensing technologies, announced an agreement to acquire Massachusetts-based Intrinsix Corp. for approximately $33 million in cash. The closing of the acquisition is anticipated to take place during the second quarter of 2021.

Intrinsix provides System-on-Chip (SoC) design expertise in the areas of RF, mixed signal, digital, software, secure processors and interface IP for Heterogenous SoCs (chiplets). It had completed more than 1,500 successful designs with a customers such as Intel, IBM and Lockheed Martin. Intrinsix is also involved in the development of chiplets and secure processors for DARPA projects, including DARPA CHIPS program.

Jim Gobes, CEO of Intrinsix, stated: “This combination creates a powerful entity with a strong IP portfolio and advanced chip design capabilities.” Gideon Wertheizer, CEO of CEVA said: “Intrinsix’s experience and customer base in the growing chip development programs with the U.S. Department of Defense and DARPA and its IP offerings for processor security and chiplets will extend CEVA’s serviceable market and revenue base.”

ceva is targeting US Aerospace and Defense markets

Durind the earnings call earlier this week, he gave further details: “Intrinsix has built a successful business that generates more than $20 million in annual revenue, and we expect Intrinsix to contribute $10-$11 million to CEVA’s top line in the second half of 2021.” He said that the acquisition provides CEVA with three growth pillars: aerospace and defense, turnkey IP platforms that combine CEVA’s IP with Intrinsix’s chip design expertise, and secure processor IP for IoT devices and Heterogeneous SoC interface IP for chiplets.

Gideon Wertheizer: “Aerospace and defense markets have a high entry barrier to penetrate. But once you are there, it’s for the long haul. We are planning to bring our DSP in conjunction with the designs that they do and the customers that they have. The second pillar is what we call internally turnkey IP: Many system companies want to build a chip to create a competitive edge. We are not going to chip manufacturing. We will be IP company, but we allow our customers to go directly to the foundry and not take any intermediary in between.

“The third pillar is IPs that we didn’t have: security IP, secure processor IP and the IP that is called HSoC (Hybrid SoC), and this is basically chiplets. Chiplet is basically, you take different dyes and connect them into one chip. Intrinsix has a strategic relationship with Intel, that is the leader in this area and one of the anchor of their new Foundry Strategy.”

Eleven license agreements in Q1 2021

CEVA’s total revenue for the first quarter of 2021 was $25.4 million, an 8% increase compared to the first quarter of 2020. First quarter 2021 licensing and related revenue was $14.4 million, a decrease of 1%, and royalty revenue was $11.0 million, an increase of 21%. Eleven license agreements were completed during the quarter, out of which two were with first time customers. Customers’ target applications include 5G reduced capability (RedCap) connectivity, and Bluetooth, Wi-Fi and ultra-wide band (UWB) connectivity for a range of IoT, smartphones and smart home devices. Geographically, ten of the deals signed were in China, and one was elsewhere in the Asia-Pacific region.

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