Microcontroller specialists Atmel Corp. and Microchip Technology Inc. are joining hands to create a powerhouse in the Internet of Things (IoT) realm in a way that is reminiscent of the hookup between Freescale and NXP just a few months ago. The tie between the MCU kingpins is aimed at creating a full-stack silicon house with all the IoT hardware ingredients ranging from MCUs to analog to flash.

The story of Microchip's fondness for Atmel isn't exactly new. In 2008, Microchip made an unsolicited offer of nearly $2.3 billion for Atmel, but the bid came with a twist: Microchip, eyeing Atmel's microcontroller crown jewel, wasn't interested in Atmel's other businesses. So Microchip tagged another chipmaker from Arizona in a joint bid; On Semi would acquire a number of other business units that made sense for its analog and power operations.

Atmel's AVR microcontroller powers Arduino boards.


Atmel rejected the offer as being too low and too complicated. Moreover, the company took cues from this hostile takeover effort and began to shed underperforming businesses while beefing up its MCU and networking products. Meanwhile, Microchip continued growing organically by acquiring small- and mid-size companies.

The IoT Race

Their paths began to cross again amid the IoT frenzy kicking off in the early 2010s. In summer 2014, Microchip made an unsuccessful attempt to acquire CSR, a leading supplier of Bluetooth and Bluetooth Low Energy (BLE) chips, but then Qualcomm snapped up CSR. Microchip went on to acquire Taiwan–based ISSC Technologies that also specialized in Bluetooth chips.

The same year, Atmel bought Newport Media Inc. in a bid to acquire Bluetooth and Wi-Fi connectivity solutions. Apparently, both Atmel and Microchip were aimed at beefing up product portfolios for the growing IoT sector. In fact, the two companies with large microcontroller portfolios were optimizing their MCU offerings for connectivity, which is considered a fundamental building block in the IoT space.

The microcontroller market has been a strong influence in the IoT infrastructure for being a low-cost and low-power bridge between the sensor and gateway parts. Microcontrollers mostly link sensors to the IoT nodes and serve as sensor hubs in a wide array of IoT devices to gather and log data onto the network.

A lot has been written on the union of NXP and Freescale and their quest to create an IoT powerhouse. Now the hookup between Microchip and Atmel shakes up the MCU-centric IoT landscape all over again.

Microchip outbid Dialog to raise the IoT stakes.


Here are the key takeaways for Microchip from its billion-dollar deal with Atmel.

1. MCU Powerhouse: Microchip's pending acquisition of Atmel would move the Chandler, Arizona–based chipmaker to the third position in the MCU ranking following Renesas and NXP.

2. Manageable Overlaps: There is a lot of talk about different MCU architectures. However, in the 8-bit space, the hugely popular AVR and PIC families of Atmel and Microchip, respectively, enjoy a huge customer base. They can most likely coexist in volume embedded applications.

3. 16-bit MCU Complement: Atmel doesn't offer MCUs in the 16-bit space and that significantly eases the overlap concerns.

4. ARM Boost: The high-performance IoT designs are catalyzing a shift from 8-bit and 16-bit devices to 32-bit microcontrollers, and here the wind is clearly blowing toward the ARM ecosystem. Atmel is a strong player in the low-power ARM microcontroller market, and that can lead Microchip to new market segments.

5. Securing IoT: Security is a major concern in the IoT designs. Here, Atmel's expertise in security technologies like Trusted Platform Module (TPM) and crypto memories can complement Microchip MCUs in securely connecting objects and dealing with the key provisioning.

Atmel's on-chip SHA and AES crypto engines enable encryption of datastreams and accelerate authentication of applications and firmware.

6. Silicon Valley Outpost: Atmel is a Silicon Valley pioneer and it's tie-up with Microchip would bring the chipmaker from Chandler, Arizona a strategically important presence in the heart of chip industry's nerve center. Earlier, in 2015, Microchip had acquired another notable presence in Silicon Valley when it purchased Micrel.

Microchip's 32-bit microcontrollers use MIPS architecture and internal software tools.


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1 Comment

  • resi dent 2016-02-12

    Why hasn’t any one addressed the obvious monopoly and anti-copmetitive questions with this merger. Prices were kept down by the Atmel/MC rivalry, that will now be gone. People interact with 100’s of uControllers a day in everyday products that will surely be going up in price. Innovation will probably take a hit as it alwlways does during these large mergers.