Maxim Integrated Products Inc.
) recently announced that it created a Corporate Venture Group to
invest in startup companies with innovative technologies.
Maxim with its newly formed Corporate Venture Group will make
strategic investments in startup ventures and their seed
technologies that are concurrent with the company's core areas of
expertise in semiconductor products and services. Where it makes
sense for Maxim, it will also extend the partnership deal to
nurture the newbies with financial assistance for growth and
Maxim's exposure to fast-growing markets, such as smartphone,
tablets PC, factory-automation equipment and automotive requires
the company to stay abreast of technological advancements. The
level of innovation in these markets is typically very high and
product cycles are short. Therefore, it is very easy to lose a
socket (miss a design cycle), which could result in significant
losses for the company.
Maxim expects the venture to result in suitable partnerships
that could help it stay ahead of its competitors such as
Linear Technology Corp.
Texas Instruments Inc.
), among others. The venture will help Maxim to become leader in
key market segments.
It will also provide Maxim with access to new, exciting and
futuristic technologies that can change the shape of the industry.
Maxim will mainly focus on technology for automotive, industrial,
mobility and communications as these are the high-growth markets
Maxim has a long history of acquisitions. In 2012, it acquired
Genasic Design Systems Ltd. that makes chips for LTE applications.
In 2011, it acquired SensorDynamics, a semiconductor company that
develops proprietary sensor and microelectromechanical (MEMS)
solutions. Maxim has been reasonably active on the M&A front.
Therefore, it is possible that the new venture will not only bring
partners, but also identify suitable acquisition targets.
In the fourth quarter of 2012 (the last-reported quarter), Maxim
posted revenue of $605.0 million, up 5.9% sequentially, down 3.4%
year over year and within management's guidance range of
$590.0-620.0 million. Revenue was down across all end-markets in
the last quarter.
Currently, Maxim Integrated Products Inc. has a Zacks #3 Rank,
implying a short-term Hold rating.
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