Alphawave is acquiring the entire OpenFive business unit from SiFive.
Alphawave IP Group plc is acquiring the entire OpenFive business unit from SiFive Inc., the founder and leader of RISC-V computing based in San Mateo, California. All definitive agreements have been completed and the transaction is expected to close in the second half of 2022 pending customary regulatory approvals.
The acquisition will bring OpenFive’s high-speed connectivity system-on-chip (SoC) IP portfolio and a proven team based in India and Silicon Valley to Alphawave, significantly increasing its customer base globally from 20 currently to over 75, as well as nearly doubling the number of connectivity-focused IPs available to Alphawave customers from 80 to over 155. It will also provide customers with a one-stop-shop for their bundled connectivity needs in the most advanced technologies at 5nm, 4nm, 3nm, and beyond. This will include an expanded die-to-die connectivity portfolio that will accelerate chiplet delivery capabilities to customers. Alphawave has also licensed RISC-V processor IPs from SiFive as part of the transaction.
OpenFive’s proven silicon development team will enable Alphawave to offer leading edge data center and networking custom silicon solutions, as well as enhance its chiplet design capabilities. This accelerates Alphawave’s strategic goal to scale revenues by monetizing its leading connectivity IP not only through IP licensing but advanced custom silicon design.
The combination of Alphawave’s leading high-speed connectivity with OpenFive’s IP portfolio is expected to generate material revenue synergies through bundling of IP and integrated IP sub-systems as well as leveraging the two companies’ respective strengths to win complex custom silicon design wins at leading edge process nodes.
The Alphawave and OpenFive teams have worked together for over a decade. Over the last two decades, OpenFive has developed a broad and deep capability for the delivery of high-end SoC IP technologies to both RISC-V and ARM-based customers. Historically, the OpenFive team has successfully delivered to over 280 customers globally in some of the most advanced process technologies. Over 70 of these customers are pure IP customers. Their extensive custom silicon know-how has established OpenFive as a leading provider of custom silicon solutions globally and with a strong focus on the North American market. As part of the acquisition, Alphawave will be acquiring a 300+ person team, primarily in India, which will significantly expand Alphawave’s delivery capabilities.
This transaction has been signed at an inflection point in the semiconductor industry, as the importance and adoption of RISC-V technology has grown significantly in recent years. Against this backdrop, SiFive will continue to focus on its highly successful RISC-V business. As part of the transaction, Alphawave will also become a licensee of RISC-V processor technology and will continue to work with SiFive on opportunities for RISC-V collaboration, particularly in North America.
The total consideration payable by Alphawave is $210 million in cash, funded from existing cash resources, and the transaction is subject to customary closing conditions and regulatory approvals. Post-acquisition, Alphawave will continue to have significant capacity to invest in further growth opportunities across the enlarged group. Post-closing the OpenFive team will receive customary retention incentives. The transaction is expected to close in H2 2022 and will contribute significant revenues and profit immediately after closing.
“When we completed our IPO in 2021, we committed to continuing to grow and accelerate our business by deploying the capital we raised. This began with the acquisition of Precise-ITC in 2021, and the addition of the OpenFive team will further accelerate Alphawave’s business. Alphawave can now deliver bundled connectivity-focused IP solutions and custom silicon solutions like chiplets to global customers. This will enable a scale and top-line growth that we envisioned, but much faster than we expected, while continuing to deliver high growth and profit margins for years to come,” said John Lofton Holt, Executive Chairman of Alphawave.
Tony Pialis, President and Chief Executive Officer of Alphawave, stated, “We have known and worked with the OpenFive team for many years as they have established their credibility in delivering leading-edge SoC IP and custom silicon solutions in the world’s most advanced technology, and to the world’s most advanced customers. This acquisition is important for Alphawave, but also for our industry, as we will now be the leading pure-play provider of connectivity solutions in the world in whatever form-factor our customers need it – as silicon IP or in custom silicon solutions like chiplets. As we look to the future, we expect to develop and acquire additional capabilities to further expand and accelerate our leadership in connectivity. In our core business, the first quarter of 2022 is very strong and the outlook for 2022 is also strong. We expect this transaction to meaningfully impact revenues in H2 2022, pending regulatory approval of the transaction.”
“It has been a pleasure working with the Alphawave team on this transaction, and I am sure that we will continue to work together as SiFive focuses on its core RISC-V business. We were also pleased that Alphawave licensed SiFive’s RISC-V processor IP as part of the transaction, which further demonstrates the importance of SiFive RISC-V technology to high-end customers globally in a variety of end markets,” said Patrick Little, Chairman and CEO of SiFive.