The Friday Briefing: Washington gatecrashes electronica

There is usually enough to discuss at electronica without an American election joining the meeting. I suspect tariffs will get more airtime than anyone putting the programme together had intended, although Marvell has made a respectable attempt to change the subject by proposing a $115 billion acquisition. Washington has competition.

The Democrats’ victory in the House and Senate changes the balance of power, although I would be wary of anyone offering a confident prediction about what that means for tariffs. Congress has more scope to challenge the administration, but the trade powers already held by the White House do not disappear with an election result. For anyone quoting a programme today that will ship well into next year, political uncertainty remains an awkward item to price.

What interests me more this week is how much money companies are committing despite that uncertainty. Marvell’s proposed Lumentum acquisition carries an implied enterprise value of $115 billion, while onsemi is buying Ferric and ADI has completed its Alif deal. These are substantial decisions about where the industry expects its next business to come from, made without the luxury of waiting for the political weather to improve.

Europe, meanwhile, is putting money into chip design and Bosch is preparing to give its semiconductor operations a division of their own. There should be plenty to talk about in Munich, even for those of us hoping to get through the first coffee without discussing Donald Trump.

Marvell makes a $115 billion commitment to optical connectivity

The scale of Marvell’s proposed acquisition of Lumentum makes it the unavoidable industry story this week. Under the all-share agreement, Lumentum investors would receive 4.5 Marvell shares for each share they hold, leaving them with approximately a third of the combined company.

Behind the valuation is a practical constraint on AI infrastructure. Connecting larger clusters of processors requires more bandwidth without allowing the power consumed by those connections to become prohibitive. Copper remains useful over short distances, but its limitations are driving investment in optical links and closer integration between the electronics and photonics.

Marvell contributes custom silicon and electrical connectivity, while Lumentum brings lasers, optical components and indium phosphide manufacturing. Combining those capabilities would give the business greater control over how the signal chain is designed and manufactured, including the packaging work needed to bring its constituent technologies together.

The companies expect the transaction to close in the first half of 2028, subject to shareholder and regulatory approval, so there is a considerable interval between this agreement and an integrated business. Even so, the proposed combination tells customers and competitors something important about Marvell’s direction. Optical technology is becoming central to its ambitions in AI infrastructure, with specialist manufacturing capability forming part of the investment rather than something left entirely to suppliers.

onsemi buys its way closer to the processor

The other side of the AI infrastructure problem is getting power to the silicon, which explains onsemi’s agreement to acquire Ferric for $600 million in cash and up to $175 million in additional payments tied to revenue milestones.

Ferric’s integrated voltage regulators combine the controller, transistors, inductors and capacitors in a compact package. By moving conversion closer to the processor, the architecture addresses distribution losses and transient response while reducing the space occupied by the power supply. According to onsemi’s announcement, the approach can reduce board area by 50% to 70% compared with conventional discrete regulation.

That makes Ferric a useful addition to a supplier already selling power devices elsewhere in the electrical system. It gives onsemi more of the technology needed at the processor end, where increasing current demand and limited physical space make integration particularly valuable.

onsemi has raised its 2030 AI data-centre revenue target by $500 million to more than $3 billion, although it expects no meaningful near-term financial contribution from the transaction. With closing anticipated before the end of this year, the acquisition is principally an investment in the designs and customer programmes that follow.

Europe puts funding behind the design companies its fabs will need

The European Chip Design Platform, launched by the Commission this week, is intended to mobilise €525 million in investment and improve access to design tools, IP and manufacturing capacity.

Its rationale is more compelling than another general appeal for technological sovereignty. The Commission says European companies account for less than 1% of global fabless semiconductor revenue, a striking weakness alongside the region’s efforts to expand fabrication. Building manufacturing capacity and developing companies that can fill it are closely related problems, but they require different kinds of support.

For a young design business, access to EDA software and suitable IP can determine how far its funding stretches before the first tape-out. The platform brings those resources together with design support and manufacturing access, potentially reducing the amount of time and money spent assembling the infrastructure needed to develop a chip.

The implementation will deserve close attention, particularly the eligibility rules and the ease with which companies can obtain support. Nevertheless, this is a more specific intervention than simply encouraging Europe to design more semiconductors. It targets some of the costs that stand between a promising engineering team and its first manufacturable product.

Bosch gives its semiconductor business more room to grow

Bosch plans to establish a dedicated semiconductor division in January 2028, with a target of €5 billion in chip sales by 2030 and a stated intention to expand its foundry business.

The external customer opportunity is the part worth watching. Bosch’s semiconductor operations already serve automotive and consumer applications, drawing on its capabilities in MEMS sensors, silicon carbide and application-specific devices. Opening more manufacturing capacity to partners would extend that role, allowing other companies to make greater use of processes developed within a substantial systems and manufacturing business.

There is significant investment behind the plan. Bosch says it has committed roughly €3 billion to its Dresden and Reutlingen fabs in recent years and is spending about $2 billion equipping Roseville in California for silicon carbide production.

Robotics is another market the company wants to develop, building on sensor technology already used in applications ranging from domestic cleaning equipment to humanoid robots. The new division will remain within Bosch Mobility, but its intended customer base reaches considerably further than the automotive operations with which the company is most closely associated.

ADI completes its Alif acquisition

While Marvell and onsemi have agreements to work through, Analog Devices has completed its purchase of Alif Semiconductor. The original September terms specified $1.35 billion in upfront cash and up to $200 million in contingent payments, with the completion announcement providing no revised valuation.

Alif adds microcontrollers and fusion processors with local AI capabilities to ADI’s sensing, analogue processing, power and connectivity portfolio. That gives ADI a larger role in systems where measurements need to be interpreted and acted upon within the equipment, rather than passed to a separate computing platform.

Industrial condition monitoring is one example. Processing vibration data locally can support decisions without continuously transmitting the underlying measurements, bringing the processor, analogue front end and power requirements into the same design discussion.

The acquisition creates an opportunity to support more of that system through a single supplier. For existing Alif customers, the immediate interest will be in how ADI develops the tools, reference designs and support around the processors they already use. Those are also the areas where the combined portfolio could become more useful than the sum of its individual components.

Infineon brings automotive RISC-V to Munich

Infineon is bringing its first RISC-V automotive microcontroller platform to Munich, with AURIX RC1 intended to provide a common foundation across several vehicle control domains. Planned variants include up to 12 32-bit cores, an edge AI processing unit and as much as 40 MB of embedded memory.

With initial samples targeted for the first half of 2027, evaluation will begin through the virtual development environment rather than a board on the bench. That puts the software tools in an important position from the outset, particularly for teams assessing how much development work they could reuse across different vehicle applications.

It is a worthwhile discussion to have at electronica, which runs from 10 to 13 November alongside SEMICON Europa. The organisers expect around 3,500 exhibitors across 18 halls and have reworked the semiconductor area, including C5 and C6.

Something you might have missed?

BMW’s iX3 Flow concept will appear in the LOPEC Innovation Showcase at electronica’s West Entrance, where its E Ink exterior can change appearance and display animations. Created in connection with Spider-Man: Brand New Day, it takes the technology well beyond the familiar display panel and applies it across the vehicle’s bodywork.

It is an existing demonstration rather than a production-car launch, but should provide a welcome diversion from the week’s acquisitions and political arithmetic. There is also something rather appealing about a car that can change its appearance without requiring a conversation with the body shop.

What I’ll be watching after Munich is which announcements keep coming up once everyone is home. There is plenty this week that could shape the industry for years, but exhibitions also have a habit of making an unexpected conversation more memorable than the biggest launch. I’d be interested to hear what stayed with you, especially if it was something we should have paid more attention to.