Analog Devices and Linear Technology have announced today they will combine forces to create a semiconductor company worth $30 Billion.
This news follows the very recent acquisition of ARM Holdings by Japan’s SoftBank, and the later mergers, purchases or acquisitions of On and Fairchild, Avago and Broadcom, NXP and Freescale, and Microchip and Atmel, Intel and Altera, and a few more we’re forgetting at the moment.
Both Analog and Linear address similar markets; Analog Devices is best known for amps, interface, and power management ICs. Linear, likewise, isn’t known for ‘fun’ devices, but without their products the ‘fun’ components wouldn’t work. Because the product lines are so complimentary, the resulting company will stand to save $150 Million annually after the deal closes.
Analog and Linear are only the latest in a long line of semiconductor mergers and acquisitions, but it will certainly not be the last. The entire industry is consolidating, and the only way to grow is by teaming up with other companies. This leads the question if there will eventually only be one gigantic semiconductor company in the future. You’ll get different answers to that question from different people. Hughes, Fairchild, Convair, Douglas, McDonnell Douglas, North American, Grumman, Northrop, Northrop Grumman, Bell, Cessna, Schweizer and Sikorsky would say yes. Lockheed Martin and Boeing would say no. It’s the same thing.