Shares of San Jose, Calif.-based semiconductor manufacturer InvenSense Inc. (INVN) rose 33% over the course of 2016, closing on Dec. 30 at a price of $12.79.

Most of the increase in InvenSense’s share price can be attributed to the most recent one-month period in which the chipmaker saw its stock surge over 77% after an announcement that it would be acquired by Japan’s TDK Corp. The tech firm will be taken over by the Tokyo-based chipmaker in a deal with $1.3 billion, integrating InvenSense’s strength in mobile with TDK’s battery, automotive, and Internet of Things (IoT) businesses. (See also: Japan’s TDK to Acquire InvenSense for $1.3 Billion.)

InvenSense Attempts to Diversify

Throughout 2016, the U.S. chipmaker had attempted to diversify its products and wean itself off of its main smartphone customers, including Apple Inc. (AAPL) and Samsung Electronics. In early December, InvenSense announced a deal with the fourth-largest smartphone provider in the world, Chinese-based OPPO, to enhance its latest R9S and R9S Plus smartphone videos.

The firm has also recently targeted growth in the wearable technology space, offering micro-electromechanical system (MEMS) sensors and electronic imagine stabilization solutions for products such as fitness trackers, smartphones, watches and new augmented and virtual reality devices.

CEO Foresees a Strong Top Line

In the firm’s most recent fiscal 2017 second-quarter earnings report in early November, InvenSense posted revenues that met expectations, though earnings fell short of the Street’s estimates. Investors were disappointed in lower-than-expected earnings, which the firm attributed to a weakened smartphone and consumer market. InvenSense CEO Behrooz Abdi remained confident regarding investments in R&D to drive future penetration in new markets, positioning the firm for “strong top line growth in fiscal 2018” as the firm “strives to diversity” its business.

TDK’s acquisition of InvenSense protects the firm from a lack of customer and product diversification, while the Japanese firm will use the U.S. chipmaker to bolster its position in the sensor segment. 


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