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The acquisition of SoundChip, alongside the strategic customer wins, marks a major milestone for DSP Group as it emerges as a best-of-breed provider of technology and expertise for smart hearables, a market that is expected to grow rapidly. For example, according to Strategy Analytics, the total market for TWS units is expected to grow from 170 million units in 2019 to 1.2 billion units by 2024, representing an $8 billion total addressable market (TAM) for DSP Group. The company’s solutions are ideal for TWS applications as their combination of low power consumption, advanced algorithms and small footprint, enable hands-free operation and artificial intelligence (AI) processing with robust ANC over longer playback and talk times, all within the TWS earbud’s ever-shrinking form factor.
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“The global pandemic has created extensive challenges for businesses and consumers worldwide, but it has also intersected with DSP Group’s business initiatives, presenting significant new opportunities,” said Ofer Elyakim, CEO of DSP Group. “Major trends, including work from home, remote communications, and voice as a user interface, all emphasize the need for robust, integrated, and highly optimized state-of-the-art voice and connectivity solutions. DSP Group is committed to providing these solutions to meet the needs of our customers and their rapidly expanding markets. The acquisition of SoundChip is an important element of our overall strategy to efficiently deliver the highest quality and most comprehensive solutions into an expanding
TAM for voice and communications devices.”
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“We have been working closely with SoundChip on a number of shared-customer designs, and the acquisition is a natural and exciting evolution for us both,” said Ran Klier, CVP & GM Hearables and UC product lines at DSP Group. “Our tier one customer base includes some of the world’s leading headset brands. For them, and for all of our current and future customers, we are highly optimistic that the unique combination of DSP Group’s SmartVoice and SoundChip’s ANC technologies will generate solid demand for their next generation of hearable products.”
“ANC represents a unique and challenging system-level problem. The high degree of coupling that exists between a headset’s acoustic, mechanical and hardware components creates a level of complexity that is often difficult for customers to master while attending to other important aspects of their products’ design,” said Mark Donaldson, SoundChip’s CEO. “Through our close collaboration with DSP Group, we have been able to successfully integrate our leading ANC technologies into a family of smart codecs that are gaining strong traction in the marketplace. In joining DSP Group, SoundChip’s talented team of electroacoustic engineers very much looks forward to multiplying this success.”
DSP Group has agreed to pay $14.5 million in cash upon closing of the acquisition and up to an additional $6 million subject to the performance of certain business criteria. The transaction is projected to close in the third quarter of 2020, subject to customary closing conditions. DSP Group expects to fund the transaction from existing cash.
For more information about DSP Group, visit www.dspg.com
For further information about SoundChip, visit www.soundchip.com