Infosys to acquire semiconductor firm InSemi
BENGALURU, INDIA — Information technology (IT) firm Infosys is set to acquire semiconductor design and embedded services provider InSemi for an undisclosed amount.
Infosys expects the acquisition to fortify its research and development capabilities and its global market position.
With semiconductors as a critical component in almost every venture across multiple industries, the acquisition aligns with Infosys’ mission to be a leader in tech innovation.
“With the advent of AI, Smart devices, 5G and beyond, electric vehicles, the demand for next-generation semiconductor design services integrated with our embedded systems creates unique differentiator. InSemi is a strategic investment as we usher a next wave of growth and a leadership position in Engineering R&D,” said Dinesh R, Executive Vice President & Co-Delivery Head, Infosys.
With InSemi under its wing, Infosys also expects to hasten its chip-to-cloud initiatives. This will expand the firm’s current collaborations centered on artificial intelligence. The India-based firm also expects the pact to fresh growth trajectories through new industry partnerships.
InSemi was founded in 2013 and offers end-to-end semiconductor design services with expertise across electronic design, platform design, automation, and embedded and software technologies.
It serves leading multinational firms from industries including semiconductor, consumer electronics, automotive, and hi-tech.
The microchip war between global superpowers U.S. and China has limited mergers and acquisitions within the semiconductor industry, which should force firms to adopt different strategies to stay afloat.
“I think the lack of mergers suggests it may be harder for large semiconductor vendors to grow, whether scaling or broadening portfolios through M&A beyond small tuck-ins, e.g., replicate an AVGO or MCHP type strategy, which would eventually result in a broader variety of [small and mid] cap type semi names if this reality remains in place moving forward,” said Matt Bryson, Senior Vice President of Equity research at Wedbush Securities.
In November 2023, Broadcom Inc. (NASDAQ: AVGO) completed its acquisition of VMware, Inc. It subsequently cut its offerings from nearly 1,000 to just two core offerings. It also halted its perpetual license sales offering and replaced it with a full subscription model.
The firm noted that bundle cuts were made in response to customer and partner feedback, as simplifying their offerings would create better value for customers. Meanwhile, the subscription model would allow for more innovation and estimable investments.
Infosys is ranked 8th in the 2023 Time Doctor OA500, an objective index of the world’s top 500 outsourcing companies. The 2024 edition of the OA500 will be released next month.
