As most integrated device manufacturers in Japan falter through a series of ineffectual consolidations and poorly executed fab-lite transitions, Megachips — founded in 1990 by seven Japanese engineers as an independent fabless chip vendor with no parent company — remains Japan’s best-kept secret success. Megachips might have the best shot to become the next MediaTek, observers familiar with the Osaka-based company have told EE Times.

Megachips is Japan’s only fabless chip company listed among the top 25 in the world by IC Insights. The company has worldwide revenues of more than $600 million.

Megachips’ CEO Akira Takata.

In a recent wide-ranging interview with EE Times, Megachips’ president and CEO Akira Takata laid out his bold plan to commit the company’s future growth not on ASICs for the domestic market, but ASSPs for the global market — by concentrating on sensor hubs for the Internet of Things, mobile, and wearable devices.

No prudent IC vendor today would dream of getting into the application processor market for smartphones — an empire already conquered by Qualcomm, Samsung, and Apple. Some, including Megachips are gunning for sensor fusion chips, motivated by smartphone vendors who are turning to a separate sensor fusion chip to offload an apps processor in their handsets.

If it works, this will be a dramatic shift in the company’s strategy, since Megachip’s cash cow is its custom ASIC business, not ASSP.

The Osaka-based company is known to be working with a select handful of Japanese system companies. Nintendo is one of the key clients Megachips has worked with since the inception of its fabless history. Although it has never unveiled its customer list (except for Nintendo), Megachips has reportedly claimed one of the top two Japanese camera companies as its large client for a long time.

Fabless chip companies ranked by 2013 sales.
(Source: IC Insights)

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