Cypress Semiconductor Corp. last week closed the previously announced acquisition for $550 million of Broadcom’s Internet of Things business unit, in a move designed to establish Cypress as a wireless IoT processor powerhouse.

Details of the newly combined teams’ IoT technology/product plans won’t be available until the partners sort through which product lines to keep (or discontinue) among current IoT-related projects.

Despite a “little overlap” between the companies’ IoT products, those destined for a hard look will be Cypress’ Bluetooth products. Under the deal, Broadcom’s team has brought its own Wi-Fi, Bluetooth and Zigbee wireless technology.

No decision has been made about Cypress’ PSoC programmable system-on-chips. It remains to be seen if that will become the foundation for the company’s new line of wireless IoT processors.

Stephen DiFranco, who came to Cypress from Broadcom and now runs the IoT business unit, stressed that the first order of business is to assure that “there will be no service interruptions” for both companies’ customers.  

Outnumbers Cypress’ original IoT team
The new unit’s directions and strategies will likely tilt toward the Broadcom team, which, dwarfs its counterpart at Cypress.

Cypress’ new IoT team consists of 450 people who came from Broadcom’s Wireless IoT business and 50 people who worked on IoT at Cypress — out of 7,000 Cypress employees.

Under the deal, in addition to its own wireless technology, Broadcom will bring to Cypress its Software Development Kit (SDK), WICED.  DiFranco calls WICED, a developer ecosystem and community, the “crown jewel” of the deal. He believes it will become the key for Cypress’ IoT business to grow.

Although he is proud of what his team accomplished at Broadcom, DiFranco acknowledged, “We [Broadcom team] had to find a new home.”

He explained that Broadcom was good at serving large customers, a profile not exactly compatible with the IoT community. Typically, the still fledgling IoT market attracts a host of smaller customers willing to try different connectivity projects and products. Broadcom proved to be a little too broad to reach those potential customers.

In contrast, Cypress has “exceptional collaterals accessible to everyone,” said DiFranco, making it easy for many to try their products. “We need to adopt that philosophy,” he said, to go for the mass market.

Product overlap
Two wireless technologies — Wi-Fi and Zigbee — are tools Cypress previously didn’t have.

Since Broadcom cut its teeth in the smartphone market, fighting for sockets with Wi-Fi and Bluetooth chips, the firm’s wireless chips’ inherent strength is in standalone offerings.

Although Broadcom made “some success” on the IoT market with combo products — Bluetooth or WiFi integrated in its own MCU, said DiFranco, “the majority of our wireless IoT chip business is in pairing our standalone chips with MCUs by someone else — such as STMicroelectronics or NXP Semiconductors.”

DiFranco’s commitment is to “continue to work with our current MCU partners,” he explained.

 

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