Cheer Up You ARM Guys: Life After M&A Can Be Good

Comfort for all those ARM guys trembling at the anticipation of rule from Tokyo comes from SiTime’s CEO Rajesh Vashist.

SiTime was bought by the Japanese company MegaChips in 2014. As with SoftBank and ARM, MegaChips knew nothing about SiTime’s business. This may have contributed to SiTime being left to its own devices. “We run as an independent entity with zero interference,” says Vashist. No one at SiTime knew anything about MegaChips back in 2014, so Vashist went off to Japan to learn. “When I went to Japan to meet them I asked them: ‘How can you afford us?’” recalls Vashist, “and they replied: ‘Easy, because debt carries 0.5% interest and we have such a superb credit rating the banks are dying to lend to us’.”

MegaChips bought SiTime because it wants to grow into a top ten company. It has some way to go because MegaChips had revenues of $640 million in its last FY while Broadcom, the No.10 company, had revenues of $8.4 billion. However SiTime is doing its bit to get them there. “We doubled our revenues in 2015 and have almost doubled them again this year, and don’t see anything slowing down for five to six years,” says Vashist. With a $6 billion timing market to address, and SiTime the leader in replacing quartz with silicon, the upside potential looks pretty well infinite.

“When, in five to seven years, our revenues reach several hundred million dollars we’ll still be under 10% of the market,” said Vashist. And the upside potential for ARM, as it seeks to become the architecture for the digital age, is pretty much infinite too.