Infineon Technologies and Cypress Semiconductor announced today that they have signed a definitive agreement under which Infineon will acquire Cypress for $23.85 in cash, for a total value of 9 billion euros. The transaction is expected to be completed by the end of 2019 or early 2020.

According to Infineon, after the acquisition of Cypress, Infineon will strengthen the core of promoting structural growth and apply the company’s technology to a wider range of areas. Cypress has a differentiated portfolio of microcontrollers, software and connectivity components that complements Infineon’s leading power semiconductor, sensor and security solutions. Combining the technical assets of both parties will provide a more comprehensive and advanced solution for high-growth applications such as electric motors, battery-powered devices and power supplies. Infineon’s security expertise combined with Cypress’s connectivity technology will enable the company to accelerate its entry into new IoT applications in the industrial and consumer markets. In automotive semiconductors, the expanded combination of microcontrollers and NOR flash memory will offer great potential, especially in the application of advanced driver assistance systems and new automotive electronic architectures.

In addition, through Cypress’s strong R&D capabilities and its importance in the US market, Infineon not only enhances the services and products offered to key local customers in North America, but also enhances its strength in other important regions. Infineon will acquire R&D in Silicon Valley and expand its presence and market share in Japan, a strategically important market.

Reinhard Ploss, CEO of Infineon, said: “This is a milestone in the development of Infineon’s strategy. We will be able to offer the most comprehensive product portfolio to connect the real world with the digital world. The two sides are highly complementary in terms of technology. This will further expand our market potential in high-growth markets such as automotive, industrial and Internet of Things.”

This transaction will make Infineon the world’s eighth largest chip maker. Based on the world’s leading power semiconductors and safety controllers, Infineon will become the leading chip supplier in the automotive electronics market.