Date: 5th Apr 2011
TI acquiring National Semiconductor is
not a smart move
The analog chip power houses Texas Instruments and National
Semiconductor have signed a definitive agreement under which
TI will acquire National for $25 per share in an all-cash
transaction of about $6.5 billion.
In analog semiconductor precision is very key thing. Power
consumption and high level of integration though important
comes later. The cost is slightly less important because
the performance can be expensive. In that sense National
Semiconductor has all these but lacks in aggressive marketing
push. TI has all these and a very aggressive marketing strategy
In many of the areas National's analog chips lead over
TI. When it comes to LED drivers and DC/DC power modules,
National's devices were looking so lovely (off course by
performance). These are just two examples where both TI
and National Semiconductor were competing with each other
and this author personally believe National's chips are
So there are competing technologies and not much complementing
technologies between these two companies. Its mostly one
is ahead of the other, such as National in solar power tracking
technology. In solar domain National is way ahead of its
competitors and also way ahead of right timing. Solar prowess
of National will give the good results mostly in 2014-15.
National is future ready for solar market but too early.
In today's market National has couple of lacking. It don't
have microcontroller product line or any such SoC to match
its analog prowess. In today's market much of analog and
power semiconductor ICs can be sold to MCU customers as
ride-on due to must need of set of analog ICs in embedded
systems. TI with its broad product portfolio in MCU and
DSP has this advantage of one stop shop for many chips.
National Semiconductor also not doing great in sales revenues
in past 1-2 years compared to the industry average.
But National should have found a better bidder than TI;
good example is Atmel. For TI also when it already has such
a immense strength in signal processing analog, this acquisition
is only worth to rank up in the vendor list, or stop other
TI's competitor from acquiring National. But to TI's customers
it is just another margin of improvement.
It looks TI strategy is to reach extremely strong position
in analog. In that case this acquisition served the purpose
to some extent and makes the life of TI marketing staff
According to this author acquisition of National by TI
is TI + National, not TI* National.
This acquisition is going to drive the strategy thoughts
of analog chip-makers in different dimensions and possibly
inducing them to go for in-organic growth. There are plenty
of options for acquisitions.