Xperi Solidifies Licensing Share in DRAM Market With Micron Deal

Xperi is making progress toward "re-establishing" its semiconductor IP business, announcing a multiyear agreement with Micron Technology for the company’s hybrid bonding IP for next-generation memory devices, said CEO Jon Kirchner on the Wednesday Q4 earnings call. The pact brings Xperi’s licensing share to 90% of the DRAM market and 55% of the NAND flash market, he said.

As part of the transition, Samir Armaly, president-IP Licensing, is leaving the company, effective March 1, Kirchner said, calling it a mutual decision. The company is looking for an IP CEO candidate who can “lead the IP business as a publicly traded company over the long term,” he said. Xperi rebranded its IP licensing business as Adeia.

Xperi plans to separate the IP and product businesses this fall, Kirchner said. It will provide more specifics about key management, strategic and capital allocation priorities, financial profiles and transaction structure closer to the separation, he said. The goal is to enable two “pure play platforms” that are better positioned to grow and compete long term, he said.

Xperi is planning a “unique streaming service offering” on its TiVo Stream platform within the next two years that will spur “engagement-based monetization revenue,” said Kirchner. TiVo Stream OS and Stream 4K comprise the company’s newly designated Media Platform unit, Xperi’s “fastest growing category,” which posted 15% Q4 revenue growth to $11.7 million on Stream 4K sales and ad revenue. It expects ads to drive double-digit category growth this year and projects TV OEMs, chipset partners and content providers will bring the first TVs powered by TiVo Stream OS to market in 2023-2024.

YouTube TV and You Tube support were added to TiVo Stream OS, and integrated into the Stream 4K guide, in Q4, Kirchner said. Discovery+, PBS and CineLife are also new to the platform. Stream 4K now covers all major streaming services, Kirchner said.

Toyota will offer HD Radio across its full next-generation infotainment system, with nearly all new Toyota cars in the U.S. coming standard with HD Radio, said Kirchner. The Toyota win “lays the foundation” for next-generation entertainment features, he said.

Some 16 car companies have been testing Xperi’s AutoStage in Europe, North America and Asia, and two OEMs are in advanced stages of testing, Kirchner said. BMW recently incorporated AutoSense occupancy monitoring in an additional car model, he said.

At CES, Xperi demonstrated a “mood-based” recommendation concept, using emotion detection to drive music and other media recommendations in vehicles for more immersive and personalized next-generation entertainment features that leverage the company's in-cabin imaging and entertainment technologies, Kirchner said.

Total product revenue in Q4 was $124.7 million, down 7% year on year, due to supply chain disruption, Kirchner said. In addition to the Media Platform category, Xperi “recast” its other product revenue categories in advance of the separation with the IP business. The pay-TV category declined 6% to $66.1 million. Revenue in the Consumer Electronics business -- including DTS audio, imaging and the nascent Perceive business -- fell 13% year on year to $24.5 million. Connected Car revenue dropped 10% to $22.4 million.

Revenue outlook for 2022 is $910 million-$950 million, said Chief Financial Officer Robert Anderson. Growth in IP will be attributable mainly to the Micron deal. Product business growth will come primarily from the Consumer Electronics business, driven by mobile and wireless products and ad revenue in the Media Platform business, he said.