Sony to buy chip firm Altair for over $200M to bolster its IoT business
Altair Semiconductors, makers of always-on 4G communication chips, will soon become the Japanese conglomerate's Israeli R&D center
21 January 2016,
The latest multinational to take advantage of Israeli tech is Japanese conglomerate Sony – which is buying Hod Hasharon-based Altair Semiconductors, a developer of 4G (LTE) chips for devices.
Electronics behemoth Sony Corp. seems determined to make its mark in the Internet of Things (IoT) arena. The company just snapped up Altair Semiconductor for $212 million to get a running start.
Israel-based Altair makes modem chip technology and develops software for LTE, the standard data communications protocol on most smartphones. Industry watchers expect LTE to be the connector of devices in the rising IoT market. Sony expects to complete the acquisition early next month.
IoT is an evolution of the Internet as we know it. It networks together everyday objects and allows them to send and receive data. Many refrigerators, cars, security systems, smartphones and other devices carry unique identifiers that pave the way for seamless communication without human intervention.
“Going forward, more and more ‘things’ are expected to be equipped with cellular chipsets, realizing a connected environment in which ‘things’ can reliably and securely access network services that leverage the power of cloud computing,” Sony said in a statement.
An Upside for Sony
Altair is known for developing and selling LTE technology-based products. According to Sony, Altair's modem chips offer low power consumption, high performance and competitive cost. The low price of the acquisition could help Sony step into the IoT world with relatively little risk.
“Internet of Things is obviously one of the hottest markets today,” Zeus Kerravala, principal analyst at ZK Research, told us. “My research actually shows we’ll have somewhere in the neighborhood of 25 billion devices connected by the end of the decade. There is certainly a lot of upside for Sony.”
Upside, indeed. Market research firm IDC has predicted that the overall IoT market in manufacturing operations will grow from $42.2 billion in 2013 to $98.8 billion in 2018. That’s a five-year compound annual growth rate of 18.6 percent.
Zeroing in on Two Markets
Sony has clear plans to expand Altair’s current business lines as it presses forward with research and development of new sensing technologies. For starters, the company noted that blending its sensing technologies -- like image sensors and Global Navigation Satellite System -- with Altair’s modem chip technology will create synergies and ultimately birth a new type of cellular-connected, sensing component devices.
Sony is specifically zeroing in on the expanding markets for wearables and IoT. The company said it plans to deliver component devices that feature both communication and sensing features, along with new LTE solutions that tap into the strengths of these devices.
“In my mind, Internet of things will have a similar effect that the Internet did, where it’s going to completely change the way business is done. I think it will have a much bigger impact than the Internet did. So from that standpoint, almost every company out there should be trying to align themselves with the Internet of Things,” Kerravala said. “Being part of the IoT ecosystem is certainly important. Down the road, whoever has the best partnerships and broadest ecosystem will be the long-term winners. I think for Sony it’s a prudent move