Dublin chip firm S3 Semiconductors sold to Adesto for $35m

10 May 2018

A silicon wafer. Image: MS Mikel/Shutterstock

Adesto snaps up chip firm from S3 Group.

Silicon Valley internet of things (IoT) player Adesto Technologies has acquired Dublin-based S3 Semiconductors from its parent company, S3 Group, in a deal worth $35m.

S3 Group, through its S3 Semiconductors business unit, has been involved in leading-edge integrated circuit design and silicon intellectual property licensing for more than 30 years.

‘The combined company is well positioned to gain increasing traction in IoT to drive toward the next phase of innovation and growth’

The S3 Group originated as a spin-out of electronics giant Philips led by Maurice Whelan. Up until 2006, Philips owned the majority of the company until S3 Group led a management buyout.

Much of the company’s history has been centred on supplying silicon design expertise and services to some of the world’s biggest technology companies.

For example, its S3 Semiconductors division has been a highly valued design partner of Arm Holdings, maker of many of the chipsets that power the world’s smartphones.

In 2015, S3 Group sold the TV technology side of its business to Accenture in a move that would boost the consulting giant’s digital video services business.

The remaining S3 Group, which has more than 200 employees, will now focus on its substantial and innovative S3 Connected Health business that is spread across 20 different therapy areas in 48 different countries.

The S3 Semiconductors division being sold to Adesto employs 44 people in its Dublin and Cork offices and a further 47 worldwide.

A new force in IoT

The deal with Adesto, a provider of innovative application-specific semiconductors for the IoT era, is valued at around $35m with additional earn-out provisions based on certain milestones to the end of 2019.

“Building on our leadership position in IoT memories, today we take a meaningful step in becoming a supplier of a broad range of innovative semiconductor products and solutions for the IoT markets,” said Narbeh Derhacobian, CEO of Adesto.

“S3 Semiconductors has a proven track record of designing and delivering differentiated ASIC products, and an extensive IP portfolio developed by a talented team of design engineers over many years. Through this acquisition, we are significantly expanding our customer base and SAM with a broader product portfolio and comprehensive systems expertise to deliver a complete solution to our customers.”

The move expands Adesto’s portfolio of technologies with analogue, mixed-signal and RF solutions, and IP. It also potentially increases the dollar content potential for IoT edge notes.

S3 Semiconductors will become a business unit of Adesto and will continue to operate under its current operating model across existing global sites, including its four design centres in Dublin, Cork, Prague and Lisbon.

“Over the years, S3 Semiconductors has built a first-class team that is focused on creating complex, high-quality custom products,” said Dermot Barry, vice-president and general manager of S3 Semiconductors.

“Joining forces with Adesto gives us access to a broader sales channel with a diversified group of top-tier customers who will benefit from our ability to deliver highly optimised ASICs with unrivalled cost economies. Moreover, the combined company is well positioned to gain increasing traction in IoT to drive toward the next phase of innovation and growth.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years