To counter TIs dominance in Analog, this does not rule out a Maxim Linear Meger. Maybe this was TI's way to get back to Silicon Valley after moving its staff nearly a decade ago to Texas;
Dont forget that TIs net purchase was only a 50% premium given that National had Cash of over $ 1 B
Today's market seems to have already figured it out:
"STMicroelectronics NV jumped 2.9 percent and Infineon Technologies AG surged 1.8 percent after Texas Instruments, the second-largest U.S. chipmaker, agreed to buy National Semiconductor."
This is reaffirmation of two trends:
1. The silicon business is mature both in the US and worldwide and will continue to experience consolidation.
2. Silicon Valley, isn't anymore. The name should be changed to Social Networking Valley or Web Valley or Google Spin Out Valley. Hardware is dying in the valley and in the nation. Mature industries are cost conscience and costs in the Valley are too high for silicon companies.
TI makes components but it sells "block diagrams", that is, superior and complete solutions
S-factor (S for solutions) revenue and profit benefit – a system’s strategic component pulls in an entire solution revenue and generates a superior profit
-- TI has to provide all solution’s elements (directly or indirectly via partners)
-- Strategically critical solution technologies are acquired or partnered
-- Power management (standard power products - a 2-year old new HPA group) was $1.77B in FY2010 - HPA group (standard signal chain products) was $1.79B
National is the second ranked power management IC vendor (after TI); nearly one-half of its total $1.4B revenues comes from power management.
National is also well positioned to become the
industry's top IC vendor in terms of performance and valuation -- IF it can reduce its large GSA expenses - something, like changing a DNA, is very difficult to do. In this win-win merger TI will solve that ;-))
National was founded in 1959; its revenues declined 50% from $2.7B in 1997 to $1.4B in 2010. For decades the company was wandering
in a digital desert pursuing "PC on chip" and other distractions; only in 2005 did National
reintroduce a word "analog" in its description.
BTW - it is also fairly obvious who will likely acquire whom next...
It is saddening to see some of the long lasting names in the semiconductor industry getting lost in the acquisition game. At one time NS was being compared with Intel and Motorola when 32 bit microprocessors were being introduced. Each company came with a totally different architecture at that time and by technical comparison the NS 32 bit architecture was rated as the best.
@GREAT-Terry: Good question. I would assume that TI will have to digest this acqusition and rebuild its cash stockpile before considering other large acquisitions. Who knows that the landscape will look like at that point.
A certain amount of deja vu, as an ex-BB/ex-TIer. There are some particular strengths in NS's portfolio and a little truth to the 'complementary' assertion. Salesforce integration and product line cross-training will take a while to work out. My take on this is that it's essentially a defensive move on TI's part. In the hands of a leaner, faster, Valley-based competitor (Maxim or LTC both come to mind), NS's staff, technologies and portfolio would be much more of a threat to TI. They just had to neutralize that. Just my few dBs worth...
The bigger challenge for Nat-Semi engineers will be the extreme micro-management within the analog business units at TI. The casual silicon valley lifestyle is not something that will work at TI. I wonder which other company will be an acquisition target now that consolidation seems to be taking place.