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What’s the sweet spot in MaxLinear’s acquisition of Silicon Motion

The news about MaxLinear acquiring Silicon Motion for $3.8 billion seems like an attempt to seek the riches in the red-hot data center market. MaxLinear, which supplies silicon for connectivity and infrastructure solutions, wants to get hold of solid-state drive (SSD) controller silicon, a key ingredient of data center electronics, in order to be competitive with the likes of Marvell.

It’s worth mentioning here that the Taipei-based Silicon Motion offers client-based SSD solutions, while Marvell is strong in both client- and enterprise-oriented HDD solutions and SSD controllers. It means that MaxLinear and Silicon Motion will have to make a foray into the enterprise SSD solutions based on the future types of 3D NAND devices to be competitive in the data center space.

According to Bloomberg, MediaTek, a developer of system-on-chips (SoCs) for smartphones, tablets, PCs and consumer electronics, was also interested in buying Silicon Motion, a developer of SSD controllers and turnkey solid-state drives. That underscores the strategic importance of the NAND flash controller technology in the long-term storage requirements.

Combining semiconductors for networking and infrastructure with enterprise storage silicon looks like a good complement for a diversified set of end-markets, including data center, smart home and industrial applications. It’s also a harbinger of another level of integration in the technology stack for both client and enterprise designs.

And that most likely sums up the story behind this semiconductor industry deal.

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