Semiconductor chip maker Texas Instruments has announced it is to acquire rival National Semiconductor for $6.5 billion.
The move will not only allow the company to expand its existing portfolio but will also let it increase its current 14 per cent market share in the analog semiconductor industry to 17 per cent.
The company also believes that it will be able to advance its revenue streams in the $42 billion semiconductor market, by not only cultivating its own semiconductor offerings but also those of National Semiconductor.
TI essentially provides power management chips for industrial equipment, PCs, tablets and smartphones. The company supplies certain semiconductor chips for Apple's iPod Touch and Motorola's Xoom tablet PC.
TI CEO Rich Templeton says that National Semiconductor will benefit from TI's vast sales force while TI will gain much from NS's industry product portfolio.
“Texas Instruments has been a pretty prudent company. There is either some kind of buried patent (owned by NatSemi) that is unbelievably attractive to them, or there were other bidders and they felt pressured to get it,” Fort Pitt Capital analyst Kim Caughey Forrest said in a statement to Reuters.
National Semiconductor, which operates out of its Santa Clara headquarters, has an employee strength of 5,800 worldwide with manufacturing units in Malaysia, Maine and Scotland.