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TI to acquire National Semiconductor business

Texas Instruments (TI) has agreed to purchase National Semiconductor in an all-cash transaction of about $6.5 billion. If the deal goes through, expect minimal affects on broadcasters.

According to IHS iSuppli, based on final results from the year 2010, the acquisition would make TI the world’s third-largest semiconductor company. The combined companies would have revenues of $14.5 billion, compared to $13 billion for Toshiba, which would fall to fourth place.

Both companies will operate independently pending close of the acquisition, which is expected to take six to nine months, according to TI.

TI has 30,000 analog products, while National Semiconductor has 12,000 such products. Combined, the two companies’ sales of analog semiconductors will represent almost half of TI’s revenues. 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, and National’s headquarters will remain in Santa Clara, CA.

TI noted that the market for analog semiconductors was $42 billion in 2010, and it was the market leader with revenues of $6 billion, or 14 percent of the market. National’s revenues in calendar year 2010 were about $1.6 billion, or 3 percent of the market.

Within the analog segment, the acquisition will particularly bolster Texas Instruments lead in the market for voltage regulators. Texas Instruments was the leading voltage regulator supplier in 2010, with $1.7 billion in revenue and a share of 18.1 percent. National was the third-largest supplier, with $758 million in revenue and 15.2 percent in revenue. With the acquisition, Texas Instruments’ voltage regulator revenue would amount to $2.4 billion in 2010, giving it a 26.5 percent share of the market.