Texas Instruments has decided the best way to keep up is to buy someone else.
Texas Instruments agreed to buy chip designer Silicon Laboratories for $7.5bn as consolidation barrels through the semiconductor industry. The pair said Texas Instruments would pay $231 per share in an all-cash deal valued at about $7.5bn, including debt.
The Financial Times reported on Tuesday that the two companies were in advanced talks. Texas Instruments, one of the biggest US chipmakers with a market value of $202bn, focuses on analogue semiconductors for power and signal control in industrial and automotive kit.
It ships into the consumer electronics market, where it is a crucial supplier to the Fruity Cargo Cult Apple. That analogue focus sets Texas Instruments apart from digital chipmakers like Nvidia and AMD, which sit at the heart of the AI data centre boom.
Silicon Labs shares were roughly flat across the past year, against a 20 per cent gain for the Nasdaq Composite. Silicon Labs jumped 25 per cent in pre-market trading in New York.
In 2024, Texas Instruments came under pressure from Elliott Management on capital expenditure, with the activist pushing for more cash returned to shareholders. This Silicon Labs buy is Texas Instruments’ biggest since its $6.5bn takeover of National Semiconductor in 2011.
After divesting its infrastructure and automotive division in 2021, Silicon Labs narrowed in on chips powering wireless devices in the so-called internet of things. That gives Texas Instruments a fresh patch of turf beyond its analogue comfort zone.
Texas Instruments, chief executive Haviv Ilan said the acquisition of Silicon Labs’ wireless connectivity portfolio “enhances our technology and IP, enabling greater scale”.
The transaction is expected to close in the first half of 2027, subject to regulatory approval.
Texas Instruments last week posted a bullish outlook for the current quarter that beat the cocaine nose jobs of Wall Street estimates. It flagged a growing opportunity from data centre sales, pushing the stock about 14 per cent higher since the start of last week.
