ESS Technology has been the quietest chipmaker in Silicon Valley. In fact, it is now profitable and has found a niche as a boutique chipmaker in high-resolution audio chips. In rebounding from the edge of obscurity, it has woven a classic David-and-Goliath story.
A number of Silicon Valley chip companies have consolidated this year as a result of global megadeals. Intel bought Altera for $16.7 billion. Avago is buying Broadcom for $37 billion. Western Digital is buying SanDisk for $19 billion. Venerable names from decades of semiconductor manufacturing are disappearing as they’re absorbed by bigger rivals. Dealogic reports that chip companies have announced $100 billion in mergers and acquisitions in the past year — almost triple the year before.
But ESS is bucking this trend by going it alone, and is moving against the tide with its products, as well. While most chipmakers have moved from analog to digital (from a continuous wave-like pattern to the on-off switches of digital ones and zeroes), ESS has gone from digital to analog. And now, almost all of its revenue comes from analog chips — compared to 2008, when most of its revenue was digital.
“We call ourselves a 30-year-old startup,” said Dan Christman, chief marketing officer at ESS, in an interview with VentureBeat. “We ship to the biggest companies, from Xiaomi to Samsung. We’ve shipped billions of chips. But we act like a startup. We’re lining up a lot of things, and we hope it will be a perfect storm.”
ESS is unveiling a series of new chips next week at the 2016 CES in Las Vegas. The company has a new series of digital-to-analog converters, or chips that go into professional audio equipment. These flagship Sabre-branded chips boast a high dynamic range of 140 decibels and can be used in audio equipment to reproduce music with minimal distortion. ESS’ current chips are used in Sennheiser’s Orpheus headset, which retails for a staggering $55,000.