Inphi Corporation, a developer of high-speed, mixed-signal semiconductor solutions for the communications, data center and computing markets, has announced an agreement to sell its memory product business to Rambus Inc. for $90 million in cash inclusive of a 12.5% escrow. The sale is expected to close in the first half of Q3 2016, the company said.
Inphi commented that the transaction will enable it to “focus its attention on the growing opportunity in the communications markets”. As the company continues to build on its leadership position in high-speed connectivity for long-haul, metro, intra- and inter-data center applications, Inphi is confident that by streamlining its business product development and go-to-market efforts, growth will accelerate.
Specifically, Inphi will be focusing on expansion in the metro-optical market, inter data center connects and its PAM product lines inside the data center.
“The strategic divestiture of our memory business allows Inphi to focus on and increase investments in our communications business,” said Ford Tamer, president and CEO of Inphi. “It is a win-win for our employees, customers, partners and stockholders. We are planning to double down on our product roadmap for long-haul, metro, inter-data center and intra-data center customers.
“As a result, we expect the higher rate of revenue growth for our core communications will become more apparent, and we expect to report higher gross and operating margins and a stronger balance sheet. In 2016, we expect a neutral to slightly accretive impact to earnings per share.”
In April 2016, Inphi announced “record” first Quarter results including 12% year-over-year revenue growth and 17% year-over-year non-GAAP earnings per share growth. Revenue in the first quarter of 2016 was a record $66.5 million on U.S. generally accepted accounting principles, up 3.3% sequentially from $64.4 million reported in Q4 2015 and up 12% year-over-year, compared with $59.2 million in Q1 2015.
By Matthew Peach