When the words “Quantenna” and “acquired” flashed across our desk, it immediately brought to mind Broadcom, Qualcomm and even Marvell as one of the companies paying $1.1 billion for the US WiFi silicon specialist. But instead a surprise suitor sprung up in the form of ON Semiconductor – a company we associate primarily with a range of IoT-focused designs ranging from wearables to pig-implantable temperature sensors and low-power Bluetooth SoCs.
When reporting on Quantenna Communications’ latest financial results for calendar 2018 last month, Faultline Online Reporter noted that the world’s principal dedicated chip vendor remained undervalued with revenues up 25% to $220.5 million.
After Quantenna published these results, financial analysts rated Quantenna stock at 1.8 on the desirability scale where 1.0 suggests a Strong Buy, 2.0 still a Buy, 3.0 a Hold, 4.0 a Sell and 5.0 a Strong Sell. We noted at the time that when diving into the technology and recent customer wins, such assessments looked close to the money or even mildly pessimistic.
But even a price tag in excess of $1 billion doesn’t surprise us. After all, Quantenna’s customer list includes some of the world’s largest operators and the company has continued to surpass all expectations with consistently solid financial results and intriguing conversations during our various trade show meetings. WiFi 6 (802.11ax) is arguably the hottest topic in WiFi right now, along with mesh networking, for which there are a lot of high expectations and clearly high demand for the next generation standard attracted the attention of ON Semiconductor.
In recent years, ON Semiconductor has also dabbled in projects including modular automotive imaging platforms and wireless charging technologies, and we understand automotive is ON Semi’s largest sector, while wireless, industrial and consumer segments are all growing quickly. Notable acquisitions prior to Quantenna include the $2.4 billion purchase of Fairchild Semiconductor and a more modest $13 million for Axsem.
Like other WiFi technology firms, whether in silicon or software, Quantenna is competing on performance, resilience and coverage with the aim of delivering consistent QoS across the whole premise, whether a home, enterprise office or public space. Its success has been founded largely on being ahead of the game so that deploying impending standards in its products ahead of ratification has been crucial. This of course is combined with a guarantee that products, primarily access points, home gateways, routers and repeaters, will be fully compatible with those standards when ratified.
We have been saying it for some time now but Quantenna’s acquisition again throws up the question of how long before someone swoops for AirTies? And could the Turkish mesh WiFi software developer too be valued above $1 billion?