IoT & Embedded Technology Blog




Infineon Boosts MCU Positioning, Pursues High-performance Edge with Cypress Acquisition

by Dan Mandell | 04/16/2020



The acquisition of Cypress Semiconductor by Infineon Technologies closed today and continues a prolonged period of embedded processor market consolidation. The takeover was not without a few bumps along the journey ending roughly 10 months after Germany’s Infineon announcing its intent to acquire Cypress for €9 billion. A month ago, there were reports that Committee on Foreign Investment in the United States (CFIUS) had recommended that the deal be blocked as a national security risk – a recurring event in the embedded semiconductor market as processing technology and IP become more critical to embedded systems and infrastructure. However, the acquisition finally won CFIUS approval as well as clearance in China to proceed. There are many synergies between the two companies in terms of the markets/regions they serve as well as the types of hardware they provide. Infineon also gains valuable differentiation for wireless, secure, and high-performance MCU computing.

The acquisition of Cypress adds different portfolios of MCUs, connectivity components, software, and high-performance memories. It also greatly extends Infineon’s processor offerings and domain expertise in different areas of wireless connectivity and security that are crucial to many of today’s IoT and embedded projects. Acquiring Cypress extended Infineon’s share in the MCU domain by more than 40% with a particular focus on automotive, consumer electronics, industrial automation, and medical markets. Cypress also opens valuable opportunities for Infineon to expand within the Japanese embedded market.

From an architectural view, Infineon’s MCU portfolio features a healthy blend of offerings featuring Arm, Intel/8051 (legacy products), and in-house TriCore CPUs. Cypress brings in a similarly spread portfolio of 8-, 16-, and 32-bit MCUs based on Arm and its own in-house RISC/CISC CPUs. In many ways, the two companies share very similar portfolios of embedded semiconductors. However, the new “shiny object” that Cypress brings to Infineon is the company’s unique families of programmable SoC (PSoC) MCUs, which integrate a variety of Arm Cortex CPUs (with heterogeneous configurations for flexible performance and low-power operation), radios, memory, and programmable analog/digital components on a single chip. PSoCs help fill the gap between costly high-power SoCs and traditional low-performance MCUs, which is a space in the market seeing growing opportunity supporting edge and IoT computing applications across different industries.

The acquisition combines the strengths of a variety of compatible embedded processing solutions addressing similar customers, markets, and applications. The combined entity now has more differentiated ammunition to compete with larger players for new edge workloads in the MCU domain. There is no current plan to change anything about how Cypress conducts business but building a bridge between the two companies’ hardware components, development tools/environments, services/support, and software ecosystems will be critical to winning new designs particularly as OEMs and others look for more tightly-integrated and comprehensive development solutions. The Infineon-Cypress acquisition has strong potential to produce more than the sum of what each organization would do individually moving forward.

VDC Research’s 2020 IoT, Embedded & Mobile Processors report will be publishing soon. See our research outline here.