Reports: TI, STMicro to add to semiconductor acquisitions spree

One thing seems clear about the semiconductor market: consolidation is showing no signs of slowing down.

On the heels of two additional acquisitions in the space around semiconductors — LAM Research acquiring KLA-Tencor and Western Digital buying SanDisk — rumors have abounded this week that there is more to come.

First, Bloomberg reported that Texas Instruments, the world’s largest maker of analog chips, is in talks to buy Maxim Integrated. TI is said to have competition for Maxim from a competitor in the analog chip space, Analog Devices.

According to the Bloomberg report, Maxim may be holding out for a hefty premium, if it does, in fact, sell.

“When asked on an Oct. 22 conference call about a possible takeover by a larger company such as Texas Instruments, Maxim Chief Financial Officer Bruce Kiddoo said the company is big enough and profitable enough to survive on its own,” Bloomberg reported. “Maxim also has the resources to do its own acquisitions, he said.”

For Texas Instruments’ part, CFO Kevin March weighed in on potential acquisitions on October 21. Bloomberg quotes him as saying: “If we were to look at an acquisition, it would probably be a company that’s going to be broad in catalog, have a diverse customer base, have a large percentage of its revenue coming from industrial and automotive, probably have a very talented R&D team. So we really do focus on the numbers that that acquisition might lead us to.”

Following the Bloomberg story, the Chicago Tribune issued a report saying STMicroelectronics is considering a bid for Fairchild Semiconductor. STMicro is Europe’s biggest chipmaker, and would be looking to “increase growth and shore up its digital products business” with the purchase, according to the report.

For its part, Fairchild, which is one of the oldest chipmakers in the US, has hired Goldman Sachs to help it find a buyer. In recent months the company has conducted talks with ON Semicondor and Infineon Technologies about being purchased, according to the Tribune.

It is still uncertain whether anything will come of either report, but it seems clear that the merger madness in the semiconductor industry is far from over.

To help readers follow this constantly changing situation, Solid State Technology is keeping a running scorecard of all the significant transactions in the semiconductor market here: Historic era of consolidation for chipmakers.

 

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One thought on “Reports: TI, STMicro to add to semiconductor acquisitions spree

  1. Bill

    Seems like the logical pairing would be Analog buying Fairchild and TI buying Maxim.

    In both cases sales and operations could easily be folded into Analog and TI in short order and the customer based are aligned.

    Fairchild is much more distressed as their manufacturing operations have been on rapid decline and despite a good basic and legacy product base have not innovated much overtime. Arguably acquiring Fairchild would be more like buying a product line.

    I do not know for sure but I seem to recall Fairchild may have someliability related to old operations which might make some reluctant.

    In regards to Maxim I would suggest that current management has done a good job of bringing Maxim out of the dark days of delisting and particularly in Asia have world class operations. That being said it seems they probably have reached their ceiling for performance. While they could remain independent it would likely be 5 years of stagnation if not shrinkage. I am not a Maxim stock holder but if I were would encourage sale now as the value is unlikely to ever be higher.

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