Exclusive: iPhone supplier InvenSense exploring sale - sources

(Reuters) - InvenSense Inc INVN.N, a U.S. semiconductor company that makes motion sensors for Apple Inc AAPL.O and Samsung Electronics Co 005930.KS, is exploring strategic alternatives, including a possible sale, people familiar with the matter said on Friday.

InvenSense shares jumped as much as 13 percent on the news, and were trading up 61 cents at $7.48 by late afternoon, giving the company a market capitalization of nearly $700 million.

If it succeeds in selling itself, InvenSense would be the latest company to be swept up by a wave of consolidation in the industry, as makers of chips for smartphones face intense price competition and seek scale.

Smartphone chip maker Qualcomm Inc QCOM.O agreed to buy NXP Semiconductors NV NXPI.O for about $38 billion this week, in the biggest-ever deal in the semiconductor industry.

InvenSense, which designs gyroscopes to help smartphones calculate motion, is working with an investment bank to explore its options, the people said. Chinese and Japanese companies are among interested suitors, they added.

There is no certainty that the sale process will result in any deal, the people cautioned.

The sources asked not to be identified because the deliberations are confidential. InvenSense could not be reached for comment.

Northland Capital Markets analyst Tom Sepenzis said in a research note last month that the growth of virtual reality, especially in China, could help InvenSense’s prospects.

“InvenSense is certainly well positioned as there are no Chinese companies offering gyroscopes,” Sepenzis said.

InvenSense, which competes with STMicroelectronics NV STM.PA and Bosch Sensortech, got a boost in August when Pacific Crest Securities upgraded the rating on its stock, arguing the gyroscopes are essential to mobile phones for augmented reality games such as Pokemon Go.

InvenSense’s chief executive Behrooz Abdi talked up the Pokemon Go opportunity on the company’s last earnings call in July, and said more consumers playing games that involve moving around with their phones would boost demand for its gyroscope products.

Reporting by Liana B. Baker in New York; Editing by Bernard Orr and Andrew Hay