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Anatomy Of An Acquisition

By John Blyler
Lattice Semiconductor’s proposed acquisition of FPGA start-up SiliconBlue Technologies for $62 million in cash is the latest signal that the smart-phone market may be showing signs of overcrowding.

While researchers are quick to point out the growth rates of smart phones sales versus computers, there also are an unprecedented number of companies vying for a stake of that market. Lattice’s push into adjacent markets is a hedge against that overcrowding.

Lattice until now has focused on the high end of the smart phone market. Silicon Blue targets mid-range players such as watch companies.

Doug Hunter, vice president of marketing at Lattice, said both companies occupy complementary spaces in the mobile consumer market. Silicon Blue offers a reduced feature set at lower power and with a one-time programmable (OTP) memory technology that it licensed exclusively from Kilopass. “This will allow us to go into customers with both a simpler and smaller or bigger and more fully featured suite of products,” explained Hunter.

By far the larger company, Lattice has more than $250 million in cash on the balance sheet with a good quality track record, said Hunter. The company also has a much wider distribution and sales network than start-up Silicon Blue, which should help win sales from customers that are reluctant to deal with a start-up company.

Still, Lattice has had its share of challenges in recent times, including numerous CEOs over the last six years and loss of market share to giants such as Xilinx and Altera. Hunter acknowledge these challenges, but highlight the company’s current strategy of finding niche to “differentiate, duck, bob and weave” against the two industry giants.

The acquisition of Silicon Blue fits that strategy. In addition to its mid-range handset sales, Silicon Blue recently won a design in an unusual ultra-lower power niche market. Watchmaker giant Citizen Watch selected SiliconBlue’s extremely low-power FPGA device for use in its new Eco-Drive Satellite Wave watch. Citizen claims that this is the world’s first solar-powered GPS-synchronized watch.

One key element in this selection by Citizen was the ultra low power of the company’s 8,000 FPGA logic cells, based on TSMCs 65nm low-power standard CMOS process. The other key factor was the tiny 4×5 mm footprint of the wafer-level chip package, where the ball-grid array (BGA) is placed directly on the wafer. This ensures a very thin package, essentially the same size as the dye.

Silicon Blue optimizes its designs for ultra-low power by using transistors with very fast switching speeds in critical areas of the design like clock trees. Additionally, their design makes use of the default “off” state inherent in FPGAs. “The network is only switched on when it is being used,” explained a company spokesman.

This move by Citizen to incorporate greater electronic functionality in its watches represents an interesting convergence between the worlds of traditionally mechanical-digital systems and fully electronic systems. Citizen’s Eco-Watch is a traditionally high-end timepiece that incorporates modern GPS technology. On the other side of the convergence are fully electronic systems like Apple’s Nano, a multimedia player with Wi-Fi connectivity that now incorporates a digital watch display.

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