Cypress Semiconductor (NASDAQ:CY) and Arrow Electronics (NYSE:ARW) recently announced an expanded partnership for Internet of Things development. The companies will collaborate on tech and marketing, and the deal also involves Arrow’s IndyCar sponsorship.
What the two companies do
Cypress has historically been a provider of digital memory chips and microcontrollers. In the last few years, though, the company has expanded its scope to become a builder of integrated wireless systems. Last summer, the company bought the WiFi and Bluetooth IoT arm of Broadcom for $550 million in cash. With it also came a software ecosystem for developers working in the space.
The purchase helped Cypress pivot to its new business focus. Dubbed Cypress 3.0, the strategy is to expand into high-growth areas in the semiconductor space. One of those areas is the automotive world. A recent note from CEO Hassane El-Khoury mentioned that the semiconductor industry is growing at about 3% a year, but chips for driver-assistance technology, connected cars, and infotainment systems were growing at 18.8%, 14.1%, and 8.7%, respectively.
Arrow Electronics will play an important role for Cypress in its new endeavors. Arrow is a provider of electronic parts and services, acting as a supply and distribution channel for its customers in more than 90 countries. Here’s how Cypress’ VP of sales, Mike Balow, explained the relationship:
“We believe expanding our partnership with Arrow will help Cypress build our leadership position in IoT connectivity and strengthen our reach in the fast-growing segments we focus on most in our target markets. Not only will we benefit from Arrow’s technical, sales and logistics expertise, but we will collaborate on more marketing opportunities as well.”
Motorsports and the IoT
What does this arrangement have to do with…