End of the Road for Micrel

Micrel Inc., one of the oldest chipmakers in Silicon Valley, has been acquired by Chandler, Arizona–based Microchip Technology Inc. for $839 million. A pure-play analog chip house will go to one of the leading microcontroller suppliers after regulatory approval amid the consolidation wave that has engulfed the semiconductor industry in the system-on-chip (SoC) era.

Apparently, the primary motive of the acquisition seems to acquire analog building blocks for MCUs, which are shaping into more powerful and diverse SoC devices to serve the emerging markets like connected car, smart home and other Internet of Things (IoT) segments. The analog and mixed-signal chip vendor from San Jose, California will bring power management assets for Microchip’s microcontroller portfolio. Moreover, its analog products for automotive, industrial and communications segments are expected to complement Microchip’s IoT initiatives.

A journey of 37 years coming to an end

Micrel, one of the prominent analog and mixed-signal chip vendors, was founded in 1978 as an independent test facility for semiconductor products with a mere capital of $300,000. Three years later, in 1981, it acquired an independent semiconductor processing facility and started focusing on custom and specialty fabrication for other IC manufacturers. Eventually, Micrel began to develop its own line of semi-custom and standard products for power electronics. Micrel went public in December 1994.

The name Micrel came from “microcircuits that are reliable.” Over the years, Micrel earned recognition for its power management offerings for the networking and communications infrastructure markets including cloud and enterprise servers, network switches and routers, storage area networks and wireless base stations. Its product portfolio comprises of timing, clock management and high-speed Physical Media Device (PMD) products.

Micrel’s family of Ethernet products comprises of physical layer transceivers (PHY), media access controllers (MAC), switches and SoC devices that support various Ethernet protocols with transmission speeds from 10Mbps to gigabit range. They are aimed at digital home, enterprise, industrial and automotive markets.

Ray Zinn co-founded Micrel and led the company for 37 years

Micrel’s co-founder Ray Zinn has led the company as President, CEO and Chairman since its inception in 1978. He won a proxy fight with the investment firm Obrem Capital Management (OCM) for the control of the company back in 2008. “Our goal is to become a billion-dollar semiconductor company on a revenue basis,” Zinn told The Wall Street Journal back in 2010. Micrel was a relatively smaller analog chip vendor compared to rivals like TI, Linear and Maxim and probably that made it a more attractive acquisition target.

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Majeed Ahmad is author of books Age of Mobile Data: The Wireless Journey To All Data 4G Networks and Essential 4G Guide: Learn 4G Wireless In One Day.