Texas Instruments (TI) has signed a definitive agreement to purchase National Semiconductor in an all-cash transaction of about US$6.5 billion. Both companies will operate independently pending close of the acquisition which is expected to take six to nine months, according to TI.
Each company has unique strengths, TI said. Among them are the breadth of TI's 30,000 analog products and industry-leading manufacturing including the world's first 12-inch factory for analog ICs, TI indicated. National brings a portfolio of 12,000 analog products. Upon close of the transaction, National becomes part of TI's analog segment, and sales of analog semiconductors will represent almost 50% of TI's revenues, TI pointed out.
"The combined sales team will be 10 times larger than National's is today, and the portfolio will be exposed to more customers in more markets," said Rich Templeton, TI's chairman, president and CEO.
The combined company also will benefit from National's manufacturing operations, located in Maine, Scotland and Malaysia, which TI will continue to operate. Each site has additional capacity to increase production. National's headquarters will remain in Santa Clara, California.
TI noted that the market for analog semiconductors was US$42 billion in 2010, and it was the market leader with revenues of US$6 billion, or 14% of the market. National's revenues in calendar year 2010 were about US$1.6 billion, or 3% of the market.
According to IHS iSuppli, based on final results from the year 2010, the National acquisition would make TI the world's third largest semiconductor company. The combined companies would have revenues of US$14.5 billion, compared to US$13 billion for Toshiba, which would fall to fourth place.
The National acquisition also will expand TI's leadership in the global market for analog ICs, IHS indicated. TI in 2010 earned US$6.4 billion in analog IC revenues, accounting for 13.7% of global market revenues and making it the world's largest supplier. With the addition of National's US$1.4 billion in sales, TI's total analog revenues would rise to US$7.8 billion, giving it a 16.8% share of the market. This would expand TI's lead over second-place supplier STMicroelectronics to 8.8pp, up from 5.7pp before, IHS said.
TI previously acquired an 8-inch wafer fab from Cension Semiconductor Manufacturing Company, a government-sponsored wafer fab that Semiconductor Manufacturing International (SMIC) manages. Before this deal was announced in October 2010, TI already took over two fabs from Spansion Japan, formerly a subsidiary of Spansion.