Photo Illustration: Tom Hall/Bloomberg

Funding Boost for U.K. Chip Firm Aiming at Amazon, Apple Voice-Control Market

  • German chipmaker leads $15m funding round in British firm
  • Chips that make smart gadgets respond more like human beings

Infineon Technologies AG bought a stake in U.K. audio specialist Xmos Ltd. as the German chipmaker seeks to gain from rapidly growing demand for voice-controlled devices like Inc.’s Echo assistant and the Google Home speaker.

Infineon led a $15 million funding round in Bristol-based Xmos, which develops sophisticated voice processors and algorithms. Infineon wants to pair those with its own microphones and gesture-tracking products to improve the interaction with smart home gadgets by, for instance, better filtering out background noise. The technology is aimed at potential customers such as Amazon, Apple Inc. and Samsung Electronics Co., said Andreas Urschitz, who heads Infineon’s power management and multimarket division.

The market for voice-controlled devices “is a strategic growth area for Infineon,” Urschitz said in a phone interview. “We can jointly bring the user experience for voice control to an entirely new level.”

The market is promising. Shipments of intelligent home speakers surged almost seven-fold year-over-year to 4.2 million units in the fourth quarter, according to consultant Strategy Analytics. Spending on smart-home related hardware, services and installation fees will reach $155 billion by 2022, up from almost $90 billion this year, with devices accounting for about half of that, the consulting firm estimates.

And it’s not just the Amazon Echo, Google Home, or Apple’s yet-to-be released HomePod that will drive demand for these chips. Infineon and Xmos expect voice control to increasingly replace touch technology in household devices such as TVs, thermostats and robot vacuums, partly because the user experience will improve and chips get smaller and cheaper.

Chips are even set to make their way into furniture -- think voice-controlled beds, Xmos Chief Executive Officer Mark Lippett said. To be successful, the chips need to be "the most economical,” he said.

Infineon already sells or is working on sensors that let devices to listen, see, smell, and feel temperature or pressure, and it expects the partnership with Xmos to speed up the development of its chip designs, Urschitz said. Infineon didn’t disclose the size of its Xmos stake, calling it a strategic minority investment.

“We want to jointly advance communication between a person and a machine to a point where it resembles more and more like two people interacting,” Urschitz said.

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