Sivers Semiconductors AB, a supplier of integrated chips and photonics modules for advanced communications and sensor solutions, is planning to merge its Sivers Photonics Ltd subsidiary ("Sivers Photonics") with byNordic Acquisition Corporation ("byNordic"), a publicly-traded special purpose acquisition company. The proposed transaction would create a standalone, publicly traded photonics company that will be funded by significant cash reserves upon completion of the de-SPAC process.
Sivers consists of two distinct wholly owned subsidiaries addressing two different markets: Wireless and Photonics. The Sivers' Photonics subsidiary is one of the world's advanced suppliers of semiconductor photonic devices. With a particular focus on indium phosphide (InP) laser sources, Sivers Photonics develops customizable lasers aimed at high-growth artificial intelligence infrastructure and sensing applications for data centers, consumer healthcare and automotive LIDAR.
The Sivers' Photonics subsidiary has developed a unique portfolio of technologies underpinned by 25+ years of research and development and has 80 employees, including 12 PhDs. The company has three issued patents and 16 patents pending across the US, UK, Canada and the World Intellectual Property Organization. Additionally, Sivers Photonics currently has development contracts to develop unique, high-performance lasers for several leading SiPh providers, such as Ayar Labs, and is in discussion with several leading AI companies, including hyperscalers.
Subsequent to the proposed spin-off and Sivers Photonics merger combination, Sivers remaining wireless business will consist of a portfolio of leading products in mmWave beamformer front-end integrated circuits, RF transceivers, repeaters, and software algorithms for optimum mmWave RF performance for satellite and 5G Infrastructure. Wireless business net revenue growth was 155 percent in 2023, reaching approximately $15 million. These markets are developing rapidly, and Sivers has secured a number of contracts and design wins that are projected to drive significant product revenue growth over the next 3-5 years.
Sivers Photonics is a leading company within tunable multi-wavelength lasers for direct on-chip integration. According to industry research, the number of sold GPUs for generative AI will grow substantially to approximately 18 million units, which management estimates will result in a total addressable market for chip-to-chip connectivity of $5 billion and a served addressable market of up to $1 billion by 2027. Demand for Artificial Intelligence applications is projected to require staggering increases in processing capability and energy consumption. According to the Electric Power Research Institute, data centers could use up to 9% of total electricity generated in the United States by the end of the decade, more than doubling the current consumption. The application of silicon photonics, or SiPh, for data centers, is the leading solution with the capacity to deliver the chip-to-chip connectivity needed to remove the bottlenecks for generative AI, while significantly reducing energy consumption. SiPh moves data with light rather than electrons in copper wire, resulting in faster data transmission, lower latency, and up to 90% reduction in power consumption compared to copper wire solutions.
Additionally, consumer biometric sensors using photonic lasers are enabling innovative wearable healthcare products for new applications ranging from tracking personal fitness to monitoring human biometrics and point-of-care solutions. Over the past few years, a single customer has invested over $18M in development contracts with Sivers Photonics to refine and optimize lasers for biometric sensors. While this market remains in its early stages of development, Sivers Photonics' deep R&D expertise has created a unique competitive advantage in supplying sophisticated photonic bio-sensors to this growing market.
"We believe the potential for AI Photonics is immense yet overshadowed by the equally exciting Sivers' Wireless business unit. With the attractive opportunity for silicon photonics in AI infrastructure and the emerging demand for photonic biometric sensors, we feel now is the right time to shine a light on this business unit as a standalone entity to gain access to the U.S. capital markets and create an opportunity for our shareholders to participate in its potential future success," said Bami Bastani, Sivers Semiconductor Chairman. "At the same time, we also look to capitalize on the success of the Sivers' Wireless business unit and the demand for our leading-edge mmWave beamformer solutions for satellite and 5G, which has gained substantial traction with customers in these developing markets over the last several years, enabling us to create a fully fabless and less capital-intensive company that will remain listed under Sivers Semiconductors AB."
This transaction is expected to unlock significant value and create an independent U.S.-listed entity, which will bring Sivers Photonics closer to investors, customers, and partners within the US AI ecosystem. Sivers Photonics currently has approximately 80% of its net revenue in the U.S.
Under the terms of the non-binding LOI, byNordic and Sivers intend to enter into a definitive agreement for the acquisition of Sivers Photonics. The completion of the business combination is subject to the completion of due diligence, the negotiation and execution of definitive documentation and satisfaction of the conditions contained therein, including (i) securing certain concurrent financing, (ii) completion of any required stock exchange and regulatory reviews and (ii) approval of the transaction by byNordic's and Sivers Photonics' Boards of Directors and stockholders. The terms of the proposed transaction provide that Sivers Photonics would be spun out and merged with byNordic, with the former equity holders of both Sivers Photonics and byNordic (following the completion of the Business Combination) holding equity in the combined publicly listed company, with Sivers holding majority ownership in the combined publicly listed company. Once the merger is finalized, the company plans to establish headquarters in Silicon Valley, CA with the manufacturing operations remaining in the U.K.
Sivers management will update this announcement when further clarity on these issues is achieved. In the interim, Sivers management will provide no further comment beyond what is described in the press release, given the sensitivity of the negotiations.
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