Dialog Semiconductor continues its acquisition strategy to strengthen its internet of things (IoT) portfolio, today announcing it intends to acquire mixed signal IC developer Creative Chips GmbH for a cash payment of $80m, with an additional $23 million contingent on revenue targets in 2020 and 2021.

Creative Chips

Creative Chips in Germany

Headquartered in Bingen close to Frankfurt, Germany, with an additional design center in Dresden, Creative Chips is a fabless semiconductor company that supplies a broad portfolio of industrial Ethernet and other mixed-signal products to manufacturers of industrial and building automation systems.

Its technology is optimized to connect large numbers of industrial IoT (IIoT) sensors to industrial networks. Based on its custom IC business, Creative Chips is also developing a range of complementary standard IO-Link IC products, to address broader connectivity for Industry 4.0 applications.

With Creative Chips, Dialog expects to gain top-tier industrial customers with existing relationships built over the course of the former’s 20-year history; and establish a key strategic building block for Dialog to realize its larger ambitions in the industrial IoT.

Dialog’s CEO, Jalal Bagherli, said, “The acquisition of Creative Chips is instrumental for Dialog, giving it a strong foothold in the industrial IoT market, while still highly complementary to Dialog’s current mixed-signal business. The addition of Creative Chips and its team of highly experienced and talented engineers will help to further diversify Dialog’s product revenues, customer base and end markets by extending our reach in the industrial sector in addition to strengthening our automotive offering.”

In its press statement, Dialog said Creative Chips is expected to generate revenues of approximately $20 million in calendar year 2019 with revenue growth of over 25% per annum anticipated over the next few years.  The transaction is expected to close this quarter.

In May 2019, Dialog completed the acquisition of Silicon Motion Technology Corp.’s FCI product line for $45 million, again in a cash deal. The deal provided Dialog with a portfolio of products for battery powered IoT devices with its ultra-low power Wi-Fi systems on chip (SoCs) and modules.