Synaptics snaps Wireless IoT portfolio from Broadcom in all-cash deal

Last updated on July 26th, 2020

Synaptics announced earlier this month that it has agreed to acquire “certain assets” and manufacturing rights for the Wireless IoT business of Broadcom. The $250 million deal is all-cash, funded from the $ 700 million cash pile the company has at its disposal. A Synaptics press release says that it will acquire certain rights to the Wi-Fi, Bluetooth and GPS/GNSS products and business of Broadcom in the IoT market. The existing IoT portfolio of Synaptics include Edge computing SoCs, High-Speed video interface, Digital audio, voice and video processing controllers.

In last December’s earnings call, Broadcom’s CEO Hock Tan had referred to their Wireless businesses as standalone franchises that don’t go with other business segments of the company.

synaptics iot portfolio
Fig: Synaptics IoT portfolio (Image source: Synaptics)

Synaptics is expecting the deal to give a $65 million boost to its sales this year. Michael Hurlston, the President and CEO of Synaptics is expecting this addition of Wireless IoT portfolio from Broadcom to enhance the overall position of  the company in the fast growing IoT segment. He has stated that the acquisition “complements Synaptics’ ability to sell into a broad range of devices such as IP cameras, smart displays, speakers, home automation, and gaming consoles – all of which require cutting-edge technologies including Wi-Fi 6 and 6E, Bluetooth 5.2 and GPS L5.”

The Wireless IoT portfolio additions from Broadcom will include WiFi 4,5,6 and 6E, Bluetooth 5 & BLE and GPS L5 /GNSS.

In its investor presentation, Synaptics has said that it is expecting the revenue share of IoT portfolio to increase by 5% to reach 33% of overall revenues and further reach upto 40% in the long term.

Through this acquisition Synaptics is expecting to enter a total addressable market of $8 billion from its current $5 billion. This expanded addressable market is expected to grow at 9% CAGR through 2023.

Synaptics is expecting this deal to close in Q1 of 2021. A 60 member team will be joining Synaptics from Broadcom through this acquisition.