Synaptics Acquires DisplayLink in a Move to Enhance Video Interface Market Capabilities

July 21, 2020 by Gary Elinoff

Synaptics embraces a strategy of growth through acquisition in pursuit of DisplayLink's video compression expertise.

Synaptics, a producer of human-interface (HMI) solutions, announced this week that it has inked a definitive agreement to buy DisplayLink, a specialist in video compression technology. With a market capitalization of $2.4 billion as reported by CNN, Synaptics is financing the $305 million transaction entirely out of cash on hand.

The deal is expected to close in Synaptics’ first quarter of the 2021 fiscal year, subject to customary closing conditions. The company expects that the new acquisition will add about $94 million in annualized sales. 

The Synaptics Tactic of Growth Through Acquisition

Synaptics offers a wide range of HMI solutions including touchpads, capacitive-touch controllers, optical display drivers as well as biometric, voice, display, audio, touch and multimedia products. Markets include solutions for the smart home, PC, mobile and automotive industries.


Synaptics core markets include HMI solutions for automotive, mobile, PC, and smart home applications. Image used courtesy of Synaptics


Back in 2014, Synaptics absorbed Renesas SP Drivers, Inc., a supplier of display driver ICs (DDICs) for smartphones and tablets. Through this previous acquisition, Synaptics was able to advance its efforts into the touch and display driver integration (TDDI) markets for the mobile market while also strengthening its position in touch and DDIC products. 

Much more recently—only earlier this month, in fact—Synaptics announced that it would acquire certain assets and manufacturing rights associated with Broadcom’s wireless IoT business for approximately $250 million in another all-cash transaction. These assets include rights to Broadcom’s existing Wi-Fi, Bluetooth, and GPS/GNSS products and business in the IoT market. 


IoT device displays are also crucial to Synaptics' market share. Image used courtesy of Synaptics


The DisplayLink and Broadcom acquisitions accelerate Synaptics’ long-term IoT diversification strategy. The company’s roadmap includes delivering solutions that drive up to four 4K displays,  support for the emerging USB4 standard as well as for fast-developing 8K/10K display technology. 


DisplayLink’s Software Compression Technology

According to Michael Hurlston, President and CEO of Synaptics, key drivers in the display arena include the growing trends of work-from-home (WFH), bring-your-own-device (BYOD), and office hoteling (the practice of having professional workspaces that are unassigned to individual workers). That need for flexibility, combined with the need for high-resolution displays—more than one at a time, in fact—has driven an increased need for advancements in universal docking and casting. 

This partly explains Synaptics' pursuit of DisplayLink. One of DisplayLink's key products is a versatile line of USB displays.


DisplayLink's MIMO UM-760R 7” display. Image used courtesy of DisplayLink


DisplayLink’s compression technology facilitates universal docking and casting of high bandwidth video from any device to any display through the utilization of transport medium including USB, Wi-Fi, or Ethernet. Aimed at the multi-OS the Enterprise IT market, DisplayLink’s solutions support Windows, MacOS, ChromeOS as well as Ubuntu Linux, enabling a wide universe of devices to seamlessly dock to 4K and even 8K displays. 

Graham O’Keeffe, CEO of DisplayLink, also asserts that their expertise in video compression is simply a natural match for Synaptics' portfolio: “Our video compression technology is the perfect complement to Synaptics’ current product portfolio, and the combination of our world-class engineering teams will be able to address both existing opportunities and exciting new use cases.” 


The Display Industry

A survey published by Research and Markets reports that the total HMI market was $3.86 billion in 2017 and that by 2026 it is predicted to reach $8.95 billion. The key players were reported to be:

  • ABB Ltd
  • Honeywell International
  • Mitsubishi Electric Corporation
  • Schneider Electric Se
  • Siemens AG
  • General Electric
  • Kontron AG
  • Advantech 
  • Emerson Electric
  • Rockwell Automation
  • Yokogawa Electric Corporation

Judging by the heavy hitters therein, this appears to be a situation of “go big or go home.” This is the probable explanation of Synaptics’ apparent strategy of fast growth through aggressive acquisition.