[citation needed] In July 2005, SigmaTel acquired the rights to different software technologies sold by Digital Networks North America (a subsidiary of D&M Holdings, and owner of Rio Audio).

On July 25, 2006, Integrated Device Technology, Inc. (IDT) announced its acquisition of SigmaTel, Inc.'s AC'97 and High Definition Audio (HD-Audio) PC and Notebook audio codec product lines for approximately $72 million in cash, and the acquisition of SigmaTel's intellectual property and employee teams necessary for continuing existing product roadmap, with expected closure by the end of July.

Freescale integrated analog IP from SigmaTel into its competing product lines and continues to pursue component and Real Time OS device driver-based support for OEM's rather than the complete hardware and software turnkey system design approach of the successful SigmaTel startup that powered hundreds of millions of portable media players enjoyed by many users.

After winning MP3 player integrated circuit patent infringement suits at the U.S. International Trade Commission when the STMP35xx principal firmware engineer documented how SigmaTel firmware uses its dynamic voltage and frequency scaling related patents, U.S. Customs physically destroyed Actions Semiconductor products at the U.S. border for intellectual property infringement.

SigmaTel settled all patent litigation and in 2007 entered into a cross-licensing agreement with the Zhuhai, China-based Actions Semiconductor Co. Ltd.

Both companies also agreed not to pursue possible third-party IP infringements or new legal action against each other and their respective customers for three years.

[7] A key technology was the advanced device driver support of a broad array of multi-vendor raw NAND flash memory used for program storage and virtual memory in lieu of discrete RAM, AV file storage, and new audio recordings.

Several major contributing principal embedded software engineers from the pre-IPO period included Thor Thayer, ex-Motorolan Jeff Gleason on audio DSP, UT Austin alum Marc Jordan on boot ROM and USB, J.C. Pina, MIT's physicists Gray Abbott and William (Bill) Gordon Ph.D. Others principals formerly with the Motorola Advanced Media Platforms division that later become Freescale's multimedia group included Matt Henson of Carnegie Mellon University and Janna Garafolo.

Several IC fabs in Asia were utilized to build SoC wafers including TSMC in Taiwan.

Turnkey portable media player custom RTOS, framework, and app software was a large component of the company's success.

SigmaTel provided SoC software to equipment manufacturers of portable audio and video player chips.