The Infineon-Cypress Merger: What Does it Mean for the Electronics Industry?

Early last year, Infineon closed its $10 billion deal to take over Cypress Semiconductor, a move that promises to transform it into the world's largest producer of chips used by the automotive industry and give it more scale to succeed in the growing Internet of Things (IoT) market

Electronic Design spoke with Shawn Slusser, the senior vice president of marketing, distribution, and sales at Infineon Technologies Americas, about the process of integrating Cypress. We also asked what the two companies hope to accomplish together that they couldn't do alone.

Morra: Infineon closed its acquisition of Cypress in April 2020, just as travel restrictions and shutdowns due to COVID-19 changed how we all work. Has that had a big impact on integrating the two companies? 

Slusser: There’s no doubt that integrating the businesses has been more difficult than it would be in a normal environment. We all take personal contact for granted in the way we work, and getting to know and learn to how work with new associates when contact is remote takes a little more effort. But every workplace faces the same situation and there really have been no hard roadblocks.

We’ve also learned a few things. One is that overcommunication is a good way to make sure everybody has input, understands why decisions are made, and has a clear picture about responsibilities moving forward. Another is that the digital tools we have work very well and keep improving. Before the pandemic, people were slowly getting more comfortable with group video-conferencing systems. Of course, these are now commonplace and are very likely to remain as a big part of the workplace.

The OktoberTech 2020 Technology Collaboration Forum we held last month is another great example. We were able to reach out to more customers and partners, and provide them with concentrated, custom content in a way that probably could not be done economically face-to-face. There’s a tradeoff in the personal element, but by hosting the conference online, we were able to reach three times the number of attendees that were able to personally travel to and attend the event in past years.         

Morra: What are some ways Infineon and Cypress can do more together than they could apart?

Slusser: Together, we move into the Top 10 semiconductor companies globally. As a combined company, there are several ways to create synergies:

• Sell our expanded portfolio of products to new customers.
• Offer complete system solutions for the automotive, industrial, and IoT markets.
• Develop innovative new products and solutions by leveraging our combined IP and know-how.

Infineon is well-positioned to accelerate its corporate vision to be the link between the real and the digital world. We provide the core technology—from full chipset to software—to enable modern, connected electronic systems.

Morra: What about consolidation of your product lines? What do engineers need to know as they work on new projects? 

Slusser: This deal has really been an example of 1 + 1 = 11. There is very little product overlap and a great deal of additive value in what we can deliver to our customers.

For example, Cypress added a well-respected portfolio of microcontrollers, Wi-Fi and Bluetooth device connectivity, high-performance memories, and an embedded software ecosystem. This strengthened us in several areas where both companies were already leaders, like automotive and industrial systems.

In emerging sectors like the IoT, which had been a focus for Cypress, the company now has a broad offering of MCUs, connectivity, security, and memories, as well as a software ecosystem. The former Cypress business has a strong offering in the form of the ModusToolbox, WICED software, as well as the Cypress Developer Community 3.0. Add that to Infineon’s position in the power semiconductor business and there are opportunities for our customers to streamline supply lines and take advantage of our design expertise to shorten time-to-market. 

This was a big part of what we talked about at OktoberTech 2020. There are not many semiconductor companies with product portfolios, software tools, and technical support expertise to address opportunities in all segments of the IoT (industrial, commercial and consumer) market in general, as well as automotive and industrial segments.

One example of how this comes together for our customers is our connected smart building sensor platform. It combines a CO₂ sensor-on-a-chip, 60-GHz radar, a device authentication IC, PSoC 6 MCU, and Wi-Fi/Bluetooth connectivity to provide gas sensing and people detection on a single platform.   

Morra: We're seeing an emphasis on the Internet of Things across the technology industry. What if people just don’t want that many “smart things” in their lives? 

Slusser: We see this as a question of value. The IoT is really about what a device or system does for people—whether it’s consumer, commercial users, or plant workers on a shop floor. As with all electronic systems, the end customer will adopt the solution that makes their lives, their jobs, or their business better. We can’t predict the specific IoT products that will do that, but we are seeing them reach the market every day. 

Morra: What is it about the merged company that's different about when it comes to your IoT offering?

Slusser: In the consumer space in particular, it’s critical to assure users that their privacy is protected. This means that every device and every connection must be secured from potential leaks and the risk of hacks into someone’s home or even business devices. There are billions of devices that will be connected in IoT applications where ensuring privacy is a factor.

Cypress adds some unique strengths in security that add to one of the core competency areas of Infineon, like secure memories that protect devices and communications in industrial, automotive and IoT segments. Infineon already builds authentication products for devices, and we are a market leader in such areas as authentication, payment, financial services, and ID documents.

What we’ve got as a single company is a commitment to the idea of hardware-based security. Any connected device, and many standalone devices, must have some type of non-corruptible trusted area embedded in the hardware that, at minimum, stores a unique device ID.

Morra: The combined company is the market-share leader in automotive semiconductors. Can you share a perspective on the setbacks and delays in autonomous driving? Are they the tip of the iceberg when it comes to the problems implementing truly fail-safe, intelligent systems? 

Slusser: Clearly, designing for autonomy and ultimately self-driving systems is a tough job. We think the industry will get there and we are working hard to help make it happen. In particular, we’re working on the idea of “dependable electronics.” Dependable is the quality of being both trustworthy and reliable. It involves device and system characteristics that straddle industry segments—robustness, reliability, availability, safety, and security. These qualities are really familiar to Infineon in several of the market segments we’ve served for years, like automotive quality, functional safety, and cybersecurity.

When you consider the value of a typical auto payload—your family—self-driving is probably the most demanding non-military application for autonomous machines. But they’re not just for driving. We expect that the work we do in dependable electronics will benefit customers across our business.