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Dec 21st, 2011
Valuation of Jyve from Fairchild acquisition reveals strong need for innovative consumer gyroscope technology
While Fairchild Semiconductor never issued a press release or made a dedicated announcement regarding it we have finally been able to put together pieces of information regarding its acquisition of Jyve Inc. which was another startup founded by Janusz Bryzek (the veteran of several MEMS startups in Silicon Valley) who was also its CEO at the time.
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Deep into its Annual Report for 2010 and in the conference call transcript for its Q4:10 and 2010 Year-End numbers Fairchild mentioned and discussed the acquisition of a MEMS start-up in November of 2010. In addition, since that time Janus has repeatedly revealed in descriptions of his professional experience on several public webpages that his new MEMS venture was acquired by Fairchild in November 2010 where he is now VP Development, MEMS and Sensor Solutions. We can thus deduce from this information and these events that the inertial MEMS start-up mentioned by Fairchild by was in fact Jyve, Inc.

Some of the details of the terms and condition of acquisition which were highlighted in the Fairchild 2010 annual report certainly put the deal in the upper quartile valuation range for inertial sensors as tracked by Yole Finance especially since Jyve was probably a pre-revenue company. The deal details disclosed indicated that it consisted of an upfront payment of $11.0 million in cash combined with some contingent consideration (stock probably) to be earned out over the next five years (four now) depending on the success of the technology, are mentioned in the report. Jyve was developing inertial MEMS with a very disruptive technology, able to lower significantly manufacturing cost and possibly offering higher performance than today consumer sensors. We expect to learn more about it within the next few months including more details on Fairchild growth plans for this business unit. There are indications in the market that a product introduction is expected in 2012. So, it looks like another success story for Janusz Bryzek and an attractive acquisition for Fairchild.

As motion sensing becomes part of more and more smartphones and tablets, the hype around MEMS gyroscopes companies has never been so high. InvenSense IPO has been very successful: announced mid-November 2011 at $8.25, the shares are priced at $11.30 end November. In addition, two inertial MEMS companies have been acquired this year because of the potential for the technology in the consumer space: SensorDynamics (acquired by Maxim in July 2011 for $130.0 million in cash) and VTI (acquired by Murata in October 2011 for $265.0 million).

As the consumer inertial business gets more and more competitive, prices for 3-axis gyroscopes are getting down very quickly. Most companies are trying to find disruptive design and sensing principles to be able to reduce manufacturing cost further: the traditional comb-drive design reaches its limits in terms of miniaturization and thus cost reduction. This is where disruptive developments coming from start-up such as Jyve are raising so much interest.



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