Pixim's Acquisition of Advasense Examined

In June 2011, Pixim announced [link no longer available] the acquisition of Isreali based CMOS developer Advasense, a 7 year old company that had raised more than $20 Million USD over the last half decade. In this note, based on an interview with Pixim, we examine the motivation of the acquisition, its future potential and Pixim's overall growth.

Background of Advasense

Historically, Advasense developed CMOS imagers for mobile phone applications. Advasense's competitive advantages focused on very small pixel sizes, deep pixel well capacity delivering improved color and low light performance. Their most notable product offering was the AI05, a 5MP 1/4" CMOS sensor (an 8 minute very technical demonstration may be viewed).

Motivation and Potential for Pixim

Pixim reports that the acquisition is for Advasense's engineering team and Intellectual Property. Pixim says they are not moving into the mobile market nor will they continue offering the AI05 chip.

While Pixim did not disclose the acquisition price, we suspect the cost was modest relative to the historical funding for the company (given the appearant limited market traction of Advasense).

Pixim anticipates that Advasense's engineers and IP will help in future megapixel surveillance offerings. Currently, Pixim only offers SD solutions and does not have a public date for a megapixel release.

Pixim's Progress

Pixim reports that total unit sales of their chipsets have doubled over the last 6 months, primarily driven by uptake of their Seawolf chipset (their newest chipset released at the end of last year). Given that Pixim is only offering SD and the relative slow growth (or decline) of the overall SD market, this is fairly sizeable.

Pixim estimates that analog cameras account for 78% of chipsets shipped but that the IP proportion has increased significantly in the last year. 22% IP unit sales is notable, especially given Pixim is only shipping SD today. [Unit sales percentage is always lower than revenue percentage for IP cameras as IP cameras have a higher average selling price than analog.]