Microchip Acquires Israeli AI Chipmaker Hailo in Rescue Deal

American semiconductor giant Microchip Technology has signed an agreement to acquire Israeli AI chipmaker Hailo, which develops processors and computer vision systems for Edge AI applications. The acquisition follows a challenging period for Hailo, which faced severe cash flow and liquidity problems, emergency loans, extensive staff cuts, and the collapse of its SPAC merger plan as its valuation fell below $500 million. Although the purchase price was not disclosed, it is estimated to be significantly low compared to Hailo’s previous valuation.

Founded in 2017, Hailo raised approximately $340 million in funding rounds with a last valuation exceeding $1 billion. Key investors included the Zisapel family, OurCrowd, Alfred Akirov, and Gil Agmon’s Delek Automotive, the latter having provided emergency loans and now planning to write off most of its investment in upcoming financial reports. For Microchip, a company valued in the tens of billions and a global leader in microcontroller, FPGA, communication, and analog components, the deal grants immediate access to Hailo’s intellectual property and Edge AI technology.

Hailo’s product lineup, including the Hailo-8, Hailo-10, and Hailo-15 chip series, enables AI processing and computer vision directly on edge devices such as robots, drones, smart cameras, and industrial automation systems without full cloud dependency. The acquisition also transfers over 100 active customers and a developer community exceeding 10,000 users to Microchip.

Mark Reiten, Senior Corporate Vice President at Microchip, stated the acquisition accelerates their expansion into high-throughput Edge AI processing, helping customers build smart edge systems balancing performance, energy efficiency, reliability, and cost. Hailo CEO and co-founder Or Danon said joining Microchip provides the support needed to scale their accelerated Edge AI technology globally, leveraging Microchip’s customer reach, distribution channels, and broad technology portfolio.

The transaction is expected to close by the end of the quarter ending September 30, subject to regulatory approvals and customary closing conditions. Microchip noted the deal is not expected to materially impact its financial results.