Silicon Labs is riding high. The company's CEO Tyson Tuttle, buttonholed at the Consumer Electronics Show, conceded that his company has benefited from turmoil among its rivals, who have been preoccupied with M&A upheavals.
LAS VEGAS — Silicon Labs is riding high. The Austin, Texas-based chip vendor has taken a methodical approach in its pursuit of the IoT market, focused keenly on expanding its wireless portfolio and developing a multiprotocol environment among different wireless networks.
These efforts, most recently, resulted in a record $100 million in revenue from the company’s IoT products in the third quarter of 2017.
Silicon Labs CEO Tyson Tuttle, buttonholed at the Consumer Electronics Show, conceded that his company has benefited from turmoil among its rivals, who have been preoccupied with M&A upheavals.
Tuttle explained that during the prolonged M&A fever, companies facing uncertainty about the future tend to start either canceling programs or losing talent. Instability breeds confusion and anxiety among both customers and employees. “People tend to think, ‘we’ll wait for what will happen,’” said Tuttle.
Silicon Labs, on the other hand, has been able to snag a few stars who were formerly with Freescale or NXP Semiconductors. NXP’s acquisition by Qualcomm, originally scheduled to close at the end of 2017, is still pending. Meanwhile, Qualcomm might be acquired in a hostile takeover bid Broadcom launched late last year.
Silicon Labs’s edge, for now, is that “our customers know that we are in the IoT business for the long haul,” the CEO said. Silicon Labs is expecting its IoT business to grow at a compound annual growth rate (CAGR) of 25 percent, Tuttle told us. Noting that a half of the company’s IoT revenue is generated from wireless products, he added, “Our wireless business is growing at a 40 percent (CAGR).”
Focus on wireless
Last month, Silicon Labs announced a plan to acquire Sigma Designs for $282 million in cash. The deal is designed to broaden Silicon Labs' IoT connectivity product portfolio to include Z-Wave, a wireless mesh technology using low-energy radio waves for IoT smart home devices.
The acquisition has not closed yet, so Tuttle declined to detail plans for Z-Wave. However, the addition of Z-Wave would mark a crowning moment for Silicon Labs. It has spent several years steadily expanding its wireless portfolio — which now includes Bluetooth, Thread and Zigbee — and patiently developing multiprotocol solutions.
According to the Z-Wave Alliance, more than 2,100 interoperable Z-Wave uses have been developed, and more than 70 million Z-Wave products sold since 2001.
What about WAN?
So, what’s next for Silicon Labs? Any plans to get into NB-IoT or any other low-power Wide Area Network technologies?
Tuttle said, “Wide Area Network (WAN) is something we are monitoring,” but the company has no immediate plans in that market.
Silicon Labs’ focus has always been on Personal Area Network (PAN) and Local Area Network (LAN), but not WAN. Tuttle remains skeptical of WAN, when [cellular] operators get involved in building IoT networks. The issue for IoT device vendors is, he asked, “How are you going to make money” if you have to shell out fees to cellular networks?
Silicon Labs, thus far, has never had to build any relationships with [cellular] operators. For his company, Tuttle sees in WAN “market risks, time-to-market problems and uncertainty of overall development.”
He noted that Silicon Labs is no Qualcomm, MediaTek, Huawei or Intel. “We find WAN a difficult landscape for us. Besides, we don’t want to jump in the market where we can’t become a leader.”
Tuttle did mention last week’s announcement of a collaboration with Hager Group (Obernai, France). Hager is rolling out a new smart RF module incorporating Silicon Labs’ wireless Gecko SoC, combining 2.4GHz Bluetooth, sub-GHz KNX and Sigfox LWAN connectivity. The module is designed to enable “energy-efficient multiprotocol and multiband connectivity at 2.4 GHz, 868 MHz and 433 MHz,” according to the two companies.
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