Exclusive: Achronix, Ace Convergence CEOs Talk SPAC Deal: 'A Broad Range Of Applications'

California-based fabless chip company Achronix Semiconductor announced in early January a reverse merger agreement with the special purpose acquisition company Ace Convergence Acquisition Corp. ACEV.

On Wednesday's edition of Benzinga's show "SPACs Attack," Benzinga writer and co-host Chris Katje had the opportunity to interview both Achronix CEO Robert Blake and Ace Convergence CEO Behrooz Abdi.

The SPAC Route: Achronix was in the very early stages of a traditional initial public offering in the fourth quarter of 2020 but ultimately proceeded with a SPAC deal, Blake said.

Abdi and Ace Convergence were able to offer "domain expertise" in the data acceleration space for AI and machine learning applications, he said. 

On Ace's end, the management team evaluated a potential deal with more than 50 companies, Abdi said.

Ace ultimately chose to make a deal with Achronix, as it was familiar with its reputation and the performance of its products. What makes Achronix unique is its status as one of the few independent, high-end FPGA semiconductor companies in the market.

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Speedster7t: Speedster7t is Achronix's latest product intended for data acceleration and is programmed by customers for specific tasks, the CEO said.

As such, it emerges out of the manufacturing process blank, and customers use the company's software tools to program the chips according to their individual specifications.

"That gives us this diversity of end markets, whether that's compute acceleration or networking or 5G infrastructure," he said. "So the products have a broad range of applications."

The company has a long-term tailwind from the upcoming growth in the AI and machine learning space along with 5G communications technology that will connect billions of devices, Blake said.

Product Differentiation: As part of the public listing process, Achronix confirmed it has $240 million in orders and a design pipeline of $1.1 billion.

Abdi said he was particularly impressed with Achronix's licensing model, which he said offers gross margins "north of 90%," adding that the products offer a gross margin above 65%.

Achronix also stands out from its peers, as it offers tremendous advantages in terms of "productivity of the chips," Abdi said. Specifically, the company's ability to include more power in a chip means the end user needs fewer chips to do the same work, he said.