Chip maker Inphi sells memory business to Rambus for $90M
Semiconductor company Inphi has exited the memory business, saying it plans to increase its focus on the fast-growing communications market. The company announced its intention to sell its memory product business to Rambus for $90 million, and closed the deal just a few days later on 4 August.
The sale includes all assets of Inphi’s memory interconnect business including product inventory, customer contracts, supply chain agreements and intellectual property.
Inphi wants to focus its attention on the growing opportunities in communications. By streamlining its business product development and go-to-market efforts, the company hopes to accelerate growth in the high-speed optical communications and data centre markets.
‘The strategic divestiture of our memory business allows Inphi to focus on and increase investments in our communications business,’ said Ford Tamer, president and CEO of Inphi. ‘It is a win-win for our employees, customers, partners and stockholders. We are planning to double down on our product roadmap for long-haul, metro, inter-data centre and intra-data centre customers.’
Specifically, Inphi will focus its expansion on the metro optical market, inter data centre connects and its PAM (pulse amplitude modulation) product lines inside the data centre.
As a result, Inphi expects the higher rate of revenue growth for its core communications will become more apparent, and expects to report higher gross and operating margins and a stronger balance sheet.
In its second quarter results, just announced, Inphi reported revenue from continuing operations (without the memory business) of $60.5 million, up 12 per cent sequentially and up 22 per cent year-over-year, compared with $49.5 million (without the memory business) for Q2 2015. The company attributed this improvement to increased sales of high-margin communications products.