Mergers and Acquisitions: Analog and Linear

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 AtmelIntel 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.

29 thoughts on “Mergers and Acquisitions: Analog and Linear

  1. Linear tech isn’t known for fun devices?

    I suggest that that is all they are known for, feature-rich, expensive, high-end niche products.

    You then lead into decades old mergers in the US military aircraft industry?

    Who wrote this article, a Yahoo posting bot?

    Maybe get an analog person to write this article?

    1. I think it’s fun to work with Linear products. They always work as advertised and the reference designs and eval boards are excellent and always just works in contrast to some other brands oscillating, radiating ulser inducing mess.
      Thank you Linear for your high quality standards.
      Not affiliated, just a fanboy

      1. Exactly! In my experience Linear parts always work as described. They cost twice as much as the competition but are difficult to damage. Many times I have chosen Linear parts over competitors to save my time and money on shipping or to ensure that a low volume product meets specifications.

  2. The Aerospace analogy is a good one; In the face of increasing product complexity, risk and cost, the only way to increase shareholder value is through M&A. Meanwhile, the opportunities to innovate only increase and the barriers to do so only decrease. That meanwhile is what HAD is all about. Now get off my lawn.

  3. TI and Analog Devices tried to buy Maxim a few months ago. Maxim refused. Big mistake. They have fallen flat and the overhead expense is too high to support all of their processes. I’ll bet TI gives it another shot. Watch for that stock to shoot up again soon.

    1. Indeed. Another sad fact is: the bigger a company is, the less flexibility and innovative it become.

      I guess the current managerial trend for “constant growth” might be a cause for these kind of side moves, in order to achieve the growth target. What really scares me is that “constant growth” is, in fact, an exponential function.

      Exponential functions are _not_ sustainable. In nature, exponential phenomena ends up really bad, like in cancer, explosions or even black holes, so until the innocent “constant growth” managerial trend doesn’t change, just brace for impact!

  4. Don’t forget that Convair was once known as Consolidated-Vultee Aircraft. And before that they too were Consolidated Aircraft and Vultee Aircraft. Oh and the firm built an amazing big bomber who was well known for two things, never firing a shot in anger, and even being a good actor, that was the B-36 Peacemaker, and I’ve seen my share….

    1. My favorite aerospace firm story is the Sopwith(of WW-I and Snoopy’s Sopwith Camel)
      The Sopwith firm went under after the windfall profit punishment laws post WW-II.
      So Sopwith the man made his next firm and named it after his test pilot Hawker.
      From the Camel to the Harrier Sopwith himself was in on the design.

  5. I wonder what Bod Widlar would say about this.
    For me, Linear is one of the few companies I care about. Less competition means higher prices. Not that AD’s prices been bullshit since forever, as good as their chips may be.

  6. Brian, your retro-computing / all-digital bias is showing! :)

    For my money, there’s no more “fun” chipmakers out there than Analog and Linear. When I’m feeling blue, where a NYC socialite would pick up a new $4000 handbag, I’ll go pick up a DAC chip that would have cost $4000 twenty years ago. Cheers me right up.

  7. (1) I was surprised and shocked when one morning it was announced the TI bought National Semiconductor. Years earlier I had knows Bob Pease and always had warm feelings for National.

    (2) Not mentioned is a key contribution of Analog Devices, very high speed flash Analog-to-Digital Converters.

    (3) I’m still grieving over the loss of Mostek to ST Microelectronics (SGS/Thompson/ATES).

    (4) Somebody needs to diagram all these semi M&As.

  8. I do wish that someone would start producing some of the old M/LSI scale analog hardware of the ‘does one thing and does it well – such as the old EXAR chips, and the quasi-discretes like low/mid/high Log Amps, Window Amps, Fixed Mults, V/F and F/V’s, and such. Tunable Regenerative RF Filters that fit on a DIP-16 instead of SDRs that require 1Ghz hosts. The stuff back in the days when design consisted of more that “connect these inputs to an ADC pin on a Atmega, throw a few thousand processor cycles at it, and toggle this I/O pin when the voltage is within the range of 3.2 to 8VAC, 60 to 100Hz.”

  9. Well, there goes LTSpice – down the drain. And with the recent purchase of Yahoo by Verizon (pure Evil), there follows down the drain the very helpful LTSpice Yahoo Group (yeah I don’t like the Yahoo Groups UI), and all the YEARS the community contributed to enhancing LTSpice.

    LTSpice is (for the moment) freely available from the Linear Technologies Web site. It runs in Windows natively, but works quite well in Linux under Wine. LTSpice is proprietary, but there are no restrictions. Get LTSpice – before it’s gone!

    Why am I so worried? Simple – Analog Devices Inc. (ADI) is FAMOUS for extremely high cost development quantity parts, no sampling, and outrageous dev/demo boards. And that’s just the start. Sim tools are proprietary, brand limited, and more and more Web-based with draconian collection of personal information. Oh, and let’s not forget, ADI’s most innovative parts are often UNOBTAINIUM in dev quantities and reasonable cost. ADI is second only to Maxim Integrated in this (bad) respect.

    1. Hm? I never had problems sampling parts (for free) from Analog and Maxim over the last two decades that i’m actively working with electronics. Well, OK, i’ve never tryed to get one of the extreme +50$ chips, but these are really specific anyway and i’m not shure what you would need such a part for anyway if you’re not working on the edge of science.

  10. Although there does seem to be a lot of these mergers/acquisition lately, I’m sure in due time there will be a phase of spinoffs and splits. It would be really bad if it became just one massive behemoth of a semiconductor company, but I doubt that will happen. In the meantime, I think its a good opportunity for smaller and newer companies to innovate, by taking advantage of their flexibility. XMOS looks promising for example, hopefully they gain enough traction to become a staple of the industry.

  11. I cant tell you how disappointing it is to hear this news. Linear is a great company that cares about their customers and makes great products. Everything about their company culture reflects this. You can see it in the datasheets and in their sales network. Analog on the other hand is all about turning a quick buck, they will turn linear into a shell of its former self. As an engineer if I ever need anything from linear I can contact their company reps and get samples and support within minutes. This is what has made linear who they are. The other part that makes linear great is they go through more testing and take more time to vet their designs before releasing them. If needs be I can also get pre-production parts and I know linears product pipeline. Linear is an awesome dependable trustworthy company. Analog on the other hand could care less about its customers. Let me give you an example: I design with a certian kind of op-amp, they are built on a new technology that eliminates offset and low frequency noise. Analog does have a lower noise part than linear, however they released there part to early with out enough testing. Analogs parts exhibited voltage offset shifting, and would shift randomly a few times a day. I finally solved the problem with some unorthodox filtering. After contacting the company, I finally got a rep three months later (which they only have one rep for the entire western region). The rep looked at the data and asked for schematics. I gave them a lot of documentation and it took me a few days to produce. I thought they would give me insight into the problem. After not hearing from them for a few months I pinged Analog again, I got the same rep and he asked for the same documentation, I gave him less documentation this time. And never heard from them again. They can’t possibly keep up with their customers with a few reps in the country, and they don’t care. I later learned that they fired the original engineer that was working on that line of amplifiers. Later they released a second line of amplifiers with a similar filter that I had used to fix the problems of the first. The datasheet also explained that the amplifiers were unacceptable to EMI, it would have been useful to know that two years earlier. So what do engineers stand to gain from an Analog\Linear merger? Nothing except for more headaches and a great company turning into an ordinary company. And say goodbye to LtSpice.

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