Semiconductor Value Chain

EZchip to Buy Tilera for $130 Million

03 July 2014

EZchip Semiconductor Ltd. signed a definitive agreement to acquire Tilera Corp. for $130 million in cash adding a multi-core product portfolio to the company as well as expanding its addressable markets.

EZchip will pay $50 million at the closing of the acquisition, expected in the third quarter, and up to an additional $80 million subject to performance goals being met. Following the close of the deal, Devesh Garg, CEO of Tilera, will serve as EZchip’s president of U.S. operations.

EZchip outlined seven ways in which the Tilera acquisition will advance the Israeli company’s future including:

  1. Making EZchip a player in the multi-core CPU market.
  2. Doubling EZchip’s total available market (TAM) to $2 billion.
  3. Increasing EZchip’s U.S. presence in both Silicon Valley and Boston, Mass.
  4. Adding more than 100 Tilera customers to EZchip’s network.
  5. Opening access to data center and cloud network target markets, two markets the company already was looking at for future growth.
  6. Synergies among current product roadmaps for future processors.
  7. Diversification of EZchip’s product lines with a new CPUs and an intelligent network interface card and white box appliance family.

“While our NPU portfolio and, in particular, our new NPS targets high-end carrier and data center equipment in which a high-performance data-plane only NPU is required, the Tilera multi-core CPUs address a wide range of data-center systems in which both data-plane and control-plane run on the multi-core CPU,” said Eli Fruchter, CEO of EZchip Semiconductor, in a statement. “The addition of a multi-core product portfolio to EZchip expands and diversifies our product offerings and addressable markets.”

Multi-core processors are used in a variety of markets and products including network appliances, enterprise routers, cloud computing, video and voice encoders, network monitoring and numerous other data center and networking functions. Not surprisingly, multi-core CPUs perform multiple control and processing functions in these applications.

EZchip said that it believes there is potential to merge Tilera’s multi-core technology along with its own network processing technology to create integrated chips that may be able to address many market segments with a new offerings. However, the company did not expand upon its plans for this integration or what markets it could see these chips enter.

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