On this very point I have been researching MegaChips since the announcement trying to uncover what other customers they have on their books apart from Nintendo. I basically had no success and it tapered off a bit until the Mercedes disclosure it was using the AKIDA technology so I thought there must be something about MegaChips and the automotive sector given ADAS was a stated reason for MegaChips taking an AKIDA technology IP licence. Again I drew a blank. MegaChips has a reputation and sticks too it of not disclosing its customer base. The effect of which is that Toyota for example can take full credit for whatever technology they are using that might be supplied by MegaChips.
Then I thought what a great model MegaChips has and how appealing would it be to a company like Brainchip. They have well north of 100 NDA's (source former CEO Mr. Dinardo) and 15 plus NDA holding EAP customers who are paranoid about maintaining their first to market advantage (source Anil Mankar, Peter van der Made, Rob Telson, Mr. Dinardo, Ken Scarince, Tony Dawe). On top of this they have an ASX disclosure policy that materially impacts young growing companies and inhibits their ability to keep faith with customers despite the fact that large established companies on the ASX can totally ignore the requirement. Go figure it seems to be an anticompetitive rule to me that could be challenged under the Trade Practices Act but I will leave that for another occasion.
Then I found the following article in the EETimes from 2014 which is the most comprehensive article I have read about MegaChips and it convinced me that MegaChips needed Brainchip's AKIDA technology for its edge sensor market customers but in a tit for tat agreement Brainchip needed MegaChips long established policy of never disclosing its customers identities so that Mercedes, Ford, Valeo etc; will never need to enter an agreement for the IP with Brainchip and then be stuck with being disclosed via the ASX. Brainchip can pass them over to MegaChips to sign on the dotted line. The perfect partnership and solution to Brainchip's ASX problem. Thoroughly recommend every investor reads the following article:
Megachips: Japan’s BestKept Secret
By 11.21.2014
OSAKA, Japan — Mostengineers in the US don’t know Megachips. Never heard of it. Even over here,only a few cognoscenti in the Japanese electronics industry have the faintestidea that it’s a Japanese system LSI company in Osaka.
As most integrated device manufacturersin Japan falter through a series of ineffectual consolidations and poorlyexecuted fab-lite transitions, Megachips — founded in 1990 by seven Japaneseengineers as an independent fabless chip vendor with no parent company —remains Japan’s best-kept secret success. Megachips might have the best shot tobecome the next MediaTek, observers familiar with the Osaka-based company havetold EE Times.
Megachips is Japan’s onlyfabless chip company listed among the top 25 in the world by IC Insights. Thecompany has worldwide revenues of more than $600 million.
In a recent wide-ranginginterview with EE Times, Megachips’ president and CEO Akira Takata laid out hisbold plan to commit the company’s future growth not on ASICs for the domesticmarket, but ASSPs for the global market — by concentrating on sensor hubs forthe Internet of Things, mobile, and wearable devices.
No prudent IC vendor todaywould dream of getting into the application processor market for smartphones —an empire already conquered by Qualcomm, Samsung, and Apple. Some, includingMegachips are gunning for sensor fusion chips, motivated by smartphone vendorswho are turning to a separate sensor fusion chip to offload an apps processorin their handsets.
If it works, this will bea dramatic shift in the company’s strategy, since Megachip’s cash cow is itscustom ASIC business, not ASSP.
The Osaka-based company isknown to be working with a select handful of Japanese system companies.Nintendo is one of the key clients Megachips has worked with since theinception of its fabless history. Although it has never unveiled its customerlist (except for Nintendo), Megachips has reportedly claimed one of the top twoJapanese camera companies as its large client for a long time.
1. Fast decisions, fast actions
If you’ve ever worked with a Japanese partner whotakes forever to make decisions, hesitates to do anything new and different,and, above all, hates taking risks, you’d be overjoyed with Megachips. That’sthe first reason to get to know the company.
Stillrun by the company’s founders, Megachips is known for its decisiveness,ultra-fast actions, independent thinking, and entrepreneurial passion — traitsvirtually nonexistent among most Japanese executives working in Japan’s bigIDMs. Look no further than how quickly Megachips made deals with a host ofcompanies over the last 18 months.
2. Shopping for growth
Second, at a time when many Japanese chip vendors arefocused on retreat, cost-cutting and thinking small, a Japanese companydead-set on aggressive growth is a breath of fresh air.
SinceApril, last year, Megachips, operating under everyone’s radar, has been on ashopping spree.
Companiesrecently acquired by Megachips include Kawasaki Microelectronics and theDisplayPort business of STMicroelectronics. Megachips also made capital investmentin Vidatronics, Inc., a Texas-based fabless chip company offering leading-edgevoltage regulation and power management, in order to gain access to itstechnology.
Megachips’Taiwan-based subsidiary acquired a majority of outstanding shares of Taiwan-basedfirm Modiotek.
Themost recent acquisition of MEMS timing leader SiTime Corp. (Sunnyvale, Calif.)in October “completes my vision” for Megachips’ transformation for now, Takatasaid.
Inaddition to the host of recent M&As, Takata has been quietly taking stepsto set the company on a new course.
Takatatold us: “Three years ago when I became Megachip’s CEO, we had 275 employeeswith only a quarter of our revenues earned abroad. Today, our employees aretripled, sales are doubled, and more than 40% of our revenues are generatedoutside Japan.”
However,it’s hard to predict if Megachips’ aggressive M&A will pay off. After all,the company’s strategy — its stated transition from custom ASICs to ASSPs — hasemerged out of necessity, since Japanese system companies are expected tobecome far fewer and smaller, compared to a growing number of system companiesin the rest of Asia.
Someeven worry that Megachips, which has grown up on familiar domestic turf whereJapanese clients prefer working with Japanese chip companies, might not beready for the quick transition to a global growth plan.
Further,Megachips’ recent investments are all over the map. Some of the acquisitionslook opportunistic, and it’s hard to see a common thread that pieces everythingtogether.
Takatadisagrees. Each acquisition and capital investment will play a critical rolefor Megachips to go global and competitive in new technologies and products, hesaid.
3. Fullturnkey service
Thanks to theKawasaki-Microelectronics acquisition, Megachips is now officially afull-service chip vendor. Megachips, whose technical expertise includes imagingand telecommunications, is “the first Japanese chip vendor who has figured outwhat it takes to be a ‘turnkey’ chip company for big-system vendors,” observedone Japanese source, who spoke on the condition of anonymity. In his view, justas MediaTek knows how to handhold its system customers from chips to software iligentcustomer support.
Having always workedclosely with system vendors, Megachips’ strength in chip design is its thoroughknowledge of “systems.” The company, however, takes pride that it was never a“design team for hire.”
Takata said, “One of thehardest things in designing chips is a product definition.” The company “workswith” its customers and designs ASICs for them. In contrast, a Japanese systemcompany, historically, just tells its chip division, “Make this.” The chipdivision replied, without questioning, “We’ll do our best.”
As a fabless, Megachipsalways focused on the front-end of ASIC designs. “Our strength is designing anddeveloping algorithms and architectures on top of system LSIs,” said Takata.What Megachips lacked, however, is the back-end business. Such a process wastraditionally outsourced to Japanese IDMs like NEC or Renesas, for example.
Megachips’ CEO called theacquisition of Kawaski Microelectronics (K-Micro) “complementary,” because“K-Micro brought to us their back-end business.” He also noted that K-Microalready has people and offices worldwide including the US, China, Taiwan, andIndia. In contrast, Megachips had none.
But there appears to beanother dimension to the K-Micro acquisition. When Renesas Electronics beganits exit from the ASIC business a few years ago, customers (who used Megachipsfor front-end design and Renesas for backend) started to freak out. They askedMegachips to offer a “full turnkey service” including chip design, process nodeselection, foundry arrangements, and responsibility for assembly, testing, andoverall qualification. Megachips needed K-Micro to respond to these needs.
4. Future of DisplayPort
As for the DisplayPort business acquired from ST,Megachips’ Takata stressed that his company is no stranger to the display ICmarket.
Megachipsholds a 60% market share in the timing controller market for large displaypanels made in Taiwan and China (sans Korea). In the mobile display business,Megachips is aware that a timing controller is already getting integrated intoa system driver IC.
Takatasees DisplayPort (and embedded DisplayPort) as critical for Megachips’ futuregrowth when it gets into smartphones, set-top boxes, and TVs. In his view, HDMIwon’t be the only port in those devices.
Asthe Video Electronics Standards Association (VESA) is bringing DisplayPort tonew USB Type-C connectors, Takata fully expects it to enable computers,tablets, smartphones, displays, and docking stations to implement the new USBType-C connector at both ends, while using the DisplayPort Standard over USBType-C to transmit high-resolution A/V along with USB data and power.
Gettingkey talents like Alan Kobayashi, formerly with ST’s DisplayPort team andelected Board Chair at VESA last May, was also important. Kobayashi is now afellow and executive for R&D management for the DisplayPort Group atMegaChips Technology America.
5. Chinastrategy
Investment in Vidatroniclast April stems from Megachips’ interest in access to the Texas-based company’svoltage regulation and power management technologies. “We’d like to be able touse their technology in our ASICs, and leverage it as IP in our future chipbusiness,” explained Takata.
Megachips’ growth strategyis, however, squarely focused on the Chinese market.
Taking a majority share ofModiotek through MegaChips’ Taiwan subsidiary is a vital step for Megachips towin business in China. “We are acquiring a team of 100 people — most of themare engineers and chip designers who know software and algorithms, and work asfield application engineers,” said Takata. “When we want to work with ourcustomers in China, like Xiaomi, Lenovo, or Foxconn, we need our own people whocan negotiate and support them in Chinese.”
6. SiTime —icing on the cake
The most recentlyreported Megachips’ acquisitionof MEMS timing leader SiTime Corp. (Sunnyvale, Calif.) “completes my scenario” for Megachips’ global foray in the IoT market, said Takata. As MegaChips has recently gotten into the development of sensor hubs and sub-GHz wireless technology, Takata sees SiTime’ MEMS timing device product line as a natural fit for MegaChips’ new product portfolio for wearable and handheld devices.
“MEMS devices are small,low-power, and resistant to vibrations. In a vacuumed package, they’re alsocapable of becoming automotive grade,” said Takata. “For smartwatches orwearable devices, MEMS is the only way to go as far as timing devices areconcerned.”
7. Sensorfusion coming
Just this month, Megachipscompleted the development of a sensor hub IC called Frizz. Describing it as the new generation of sensor hub, Frizz’s claim to fame is offloading some of the tasks of processing sensor data from a host processor, but doing so in a chip, running at extremely low power, without a microcontroller.
Megachips’ designerscustomized 32-bit DSP by Tensilica (now Cadence) and integrated three-way VLIWand floating point 4-way SIMD — architecture ideally suited for matrixcomputation — necessary for such applications as pedestrian dead reckoning.Details of the new product is posted here.
Most impressive aboutMegachips’ new entry in the sensor hub market is that Frizz isn’t a singlepoint product. Megachips had its engineering sample more than 1 ½ years ago,and it’s been testing the chip, exploring applications with Chinese smartphonevendors, China’s operators, and map companies.
8. Defining products by going vertical
Megachipsused to be content to remain anonymous and never outshine its ASIC customers,while being deeply integrated in the customers’ design teams. This is all goingto change dramatically.
Whileretaining its systems perspective, Megachips hopes to crack the sensor hubmarket by taking a vertical view, ranging from chips to systems, applications,and service so it can bring genuine “turnkey” solutions to its new customers.
Megachips’strategy is not so different from MediaTek’s playbook. When Taiwan’s MediaTekdoggedly pursued China’s fairly inexperienced consumer electronics companiesgetting into the DVD player business in early 2000s, MediaTek took a long view.It developed a high-quality LSI designed with more room to correct and reshapecorrupt video signals coming out of counterfeit DVDs in China. The Taiwaneseknew the market, its customers, and its applications.
https://www.eetimes.com/megachips-japans-best-kept-secret/
My opinion only DYOR
FF
AKIDA BALLISTA
(20min delay)
