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01 Sep 2021
$160M acquisition made possible by Indie's recent SPAC-assisted Nasdaq listing.
TeraXion, the Canadian developer of advanced photonic components, is set to become part of Indie Semiconductor, a Silicon Valley upstart targeting emerging markets in automotive sensors.
According to a joint statement from the two firms, Indie will pay approximately $159 million for TeraXion, through a combination of $80 million in cash, plus 8 million Class A common shares.
That kind of deal has only recently become possible, after Indie completed a special purpose acquisitions company (SPAC) merger with investment group Thunder Bridge - raising net proceeds of around $350 million in the process.
The deal is intended to flesh out Indie’s plan to become a supplier of semiconductor and software technologies for the state-of-the-art sensors required inside the latest advanced driver assistance systems (ADAS) and autonomous vehicles.
In particular, that includes automotive lidar, where Indie and TeraXion have already established a relationship - the latter worked on an optical sensing reference design for frequency-modulated continuous-wave (FMCW) lidar.
DFB linearity
Founded in Quebec City back in 2000, TeraXion produces components including low-noise lasers, pulse stretchers for ultrafast sources, Bragg gratings for high-power fiber lasers, and integrated photonic elements - typically addressing high-performance and high-reliability applications.
For example, the firm previously collaborated with Denmark’s NKT Photonics to produce a 1556 nm fiber laser system used inside a high-precision master clock for the Atacama Large Millimeter/Sub-millimeter Array (ALMA) telescope in northern Chile.
Donald McClymont, Indie’s co-founder and CEO, said: “Specifically, TeraXion has developed leadership laser technologies that, when optimized together with our SoC [system-on-chip] solutions, enable order-of-magnitude improvements in both system performance and cost.”
TeraXion CEO Ghislain Lafrance added: “By combining Indie’s mixed-signal, DSP [digital signal processing], software, and power management experience with our laser and sensing technologies, together we intend to enable truly unparalleled solutions for ADAS and autonomous driving, as well as adjacent high-reliability applications.”
McClymont believes that the business combination will help propel Indie to “mass-market” deployments of lidar.
TeraXion currently sells a high-linearity distributed feedback (DFB) laser diode specifically aimed at FMCW lidar applications.
Said to offer a native linearity 50 times better than a standard DFB laser, the source is based on a unique epitaxial design using standard semiconductor materials and therefore compatible with low-cost, volume production processes.
The tiny device also features a very long coherence length of around 2 kilometers, with no requirement for an external cavity, and is available integrated within a fully packaged laser module to support rapid prototyping and proof-of-concept studies with FMCW designs.
Growth business
Following completion of the deal, which is expected by the end of this year, Lafrance is set to join Indie’s senior management team while continuing to lead TeraXion’s operations in Quebec City.
The addition of TeraXion should also bolster Indie’s ongoing business while the market for automotive lidar remains embryonic.
In the firm’s first quarterly financial report since the SPAC listing, Indie posted an operating loss of $18.5 million on sales of $8.8 million for the three months ending June 30.
In the current quarter, that revenue figure is expected to jump to more than $11 million, while the addition of TeraXion should add to that total significantly, and also boost profitability.
“Automotive OEMs and Tier 1 customers are increasingly seeking partners who can deliver differentiated architectures that enhance vehicle safety, connectivity, electrification, and the user experience,” observed McClymont when the results were announced August 10.
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