MOST chipmaker SMSC to be swallowed by Microchip

May 03, 2012 // By Christoph Hammerschmidt
The only manufacturer of semiconductors for the MOST infotainment network for cars, Standard Microsystems Corporation (SMSC) has agreed to be taken over by Microchip Technology Inc. The latter sells a broad spectrum of devices including microcontrollers, analog and flash IP solutions.

According to a joint press release, Microchip will pay some $939 million dollars for SMSCs assets. The partners expect the acquisition to close in the third quarter. Microchip CEO Steve Sanghi said the company regards SMSC's mixed-signal connectivity solutions aimed at embedded systems could be an "ideal complement" for Microchip's embedded control business.

The move brings the MOST semiconductor business under Microchip's control. Within the automotive industry, the fact that SMSC is the sole chip vendor for MOST devices is increasingly regarded as a drawback against industry standard solutions, in particular against the Ethernet PHY driven by the OPEN Alliance. In this context, the MOST cooperation has been advertizing its interest for second-source supplier, but so far without success. A spokesperson of the MOST Cooperation said he is convinced that the position of the MOST technology within the automotive industry will benefit from the takeover. "For MOST customers this means that the MOST technology now will be backed by an even bigger and stronger manufacturing company", he said. The spokesperson added that he believes that the efforts of the MOST cooperation for a second source of the chips will not be thrown back, since Microchip is known for its active licensing policy."

In a conference call, Microchip expressed particular interest in SMSC's patent and IP portfolio including the MOST business. Sanghi said he hopes that the takeover would help to open the doors of the automotive industry for Microchip, in particular to the infotainment sector.