Silicon Labs announced on Monday that it has sold its infrastructure and automotive business to California-based semiconductor maker Skyworks Solutions for $2.75 billion in all cash asset transaction, as planned earlier in April.
Silicon Labs designs and manufactures semiconductors and other silicon devices. CEO Tyson Tuttle said the deal will allow the company to focus on its growing intelligent wireless connectivity business.
Silicon Labs’ IoT business already serves customers assisting in IoT applications and infrastructure. The company’s infrastructure and automotive division accounted for about 42% of the company’s revenue last year, while its Internet of Things division made up about 58% of its revenue. Silicon Labs expects to utilise a significant portion of the net proceeds of approximately $2.3 billion after taxes and transaction costs to return approximately $2.0 billion to shareholders through a combination of special dividends and share repurchases.
“While sharing a common technology heritage, the Internet of Things and infrastructure and automotive businesses are fundamentally different. They have unique markets, customers, supply chains and go-to-market strategies,” Tuttle said in a written statement. “We sold our Infrastructure and Automotive business today to become a pure-play leader of secure, intelligent wireless connectivity.”
The deal divests the division’s intellectual property and 350 employees who work with the products, the company said. It has previously estimated 770 of its 1,000 employees are based in Austin. The company is doubling down on its IoT business at a time when people increasingly own more and more wirelessly connected devices, Tuttle said. He predicted the IoT market potential will only diversify and grow.
“As wireless connectivity demands continue to heighten across multiple market segments, the growth potential for Silicon Labs continues to escalate. Moving forward, we will continue to capitalize on the large, growing and diverse IoT market,” he said.