Mergers And Acquisitions: Analog Devices Snaps Up Maxim Integrated For $21 B

Analog Devices will acquire Maxim Integrated for $20.9 billion dollars in stock, as reported by Bloomberg this morning.

Perhaps the confusing part of the news is that the Bloomberg article mentions the acquisition will let Analog Devices better compete with Texas Instruments. Wait, didn’t Texas Instruments acquire Maxim back in 2015? Actually, no. There were rumors (reported then by Bloomberg) that TI was nearing an acquisition deal but it fell through in January of 2016.

You may remember that Analog Devices snapped up Linear Tech in a $30 B acquisition back in 2017. Considering this morning’s news, how will they compare to the might of TI? Looks like 2019 revenue for TI was $14.38 B while Analog reported $5.99 B. Add in Maxim’s revenue of $3.1 B and there’s still a David and Goliath scenario here. Although revenue doesn’t tell the whole story and the proverbial slingshot for Analog may be its existing portfolio of high-margin devices, grown even larger with this acquisition.

Considering how the last half decade played out, this might mark the beginning of another wild cycle of mergers and acquisitions. The consolidation trend continues as we approach a world where just a few gigantic semiconductor companies turn production lines up to eleven to fill the world’s insatiable appetite for more powerful electronics (and more electronics in general).

25 thoughts on “Mergers And Acquisitions: Analog Devices Snaps Up Maxim Integrated For $21 B

    1. I think your comment is more prescient than people may realize. In 12 months we’ll be reading about how TI is buying Analog because they over-extended themselves right in front of an impending global financial crisis.

  1. RIP Maxim’s extremely generous sample policy.

    They make (made?) really great super expensive LED and VFD display drivers, probably a lot of them are gonna get the axe.

      1. Yeah, I’ve had nothing but good relations with ADI and their reps. They always ask if I need samples of anything. Then again, I work for a reasonably sized company, so maybe that has something to do with it.

        Always had good luck with Linear tech reps and products too, and didn’t have any problems after their merger. Hopefully this one goes the same way.

  2. I no longer design Maxim parts into anything that I want to produce in volume because in my experience they make really cool parts that do exactly what I want and there’s nothing else like them. Then a year later the part goes obsolete maybe because nobody else was making anything like it. Then I’m totally stuck because…nobody was making anything like it.

    1. How times change! It used to be that you didn’t design in Maxim parts because, although they made really cool parts that dis exactly what you want, by the time you got to production the parts were on allocation, and you could only get samples.

      Plus, that time one of their trucks was hijacked, and TI helpfully provided a cross reference for customers fearing supply disruptions.

      1. Yeah, I worked at a company that had a strict “no Maxim” policy for new parts because of this. I later went to work for Maxim, and learned why this happened, which had something to do with a non-scalable upper management style. Hopefully AD will straighten this out.

  3. The big US chip makers are consolidating and increasing prices in a bid to keep prices higher. There has been a general trend towards higher prices from US chip manufactures. They are going to price themselves out of the market soon as the rest of the world are producing low cost chips.

    I’m not really bothered but the swallowing up of Maxim though as it was pointless putting anything of theirs in a design as obtaining a steady supply was almost impossible. Perhaps that will get fixed by the acquisition.

    1. Same way a person who makes $50k a year buys a $500k house, and for pretty much the same reasons: instead of spending $750k in rent over the same period and ending up with nothing more than they had on the first day, they end up with an asset that’s worth something.

      In rhis case, Analog gets another revenue stream worth $0.5B per year, and that much more coverage of the analog IC market.

    2. Finance is full of odd models and structures. It’s not about being viable, it’s about making a short term buck. Whether things crash and burn in the long run is generally irrelevant.

  4. “we approach a world where just a few gigantic semiconductor companies turn production lines up to eleven”

    That’s not how monopolies work.

    Why would they do that then? They might do it now while they are still trying to buy out more competitors. Once there are few enough competitors there is no longer a reason to expend any effort “turning production lines up to eleven”. It’s easier and more profitable just to turn prices up to 12!

  5. It seems like there is a lot of overlap in product lines, and I wonder what and how soon stuff starts getting the axe so they can shut down duplicate fabs or get rid of some particularly quirky process.

  6. Maxim made a lot of really neat ‘niche’ stuff that unfortunately did not survive in productions for very long (a year or two), which is really disappointing – mainly because they were single-use-case designs. I literally could not design anything that was not “solder-ready” using Maxim parts because the chips would either rev or EOL so fast. I seem to remember a Delta-Sigma S&H ADC/DAC combo that used a bidirectional 8 bit parallel bus for data and I2C-like channel for control – but that was back near the turn of the century, so my memories might be wrong. Been a while since I have even looked at their website.

    Analog’s stuff is often priced at near gold-plated unobtainium levels, but their LTS production is something else – especially in their DDS and Signal Gen groups. Their sample policy used to be phenomenal (not quite as good now, but it is still stellar). I remember trying to convince one of their support folks to -not- send me a slew of parts from across their product line “just in case” when I only wanted 2 of their slower 8 bit ADCs to play with.

    Hopefully, AD can fix the “here’s a.. nope, that’s EOL” management of Maxim, and Maxim’s engineers can fix the ‘high-end only’ product line problem inherent at AD.

    1. National, Fairchild, TI, Analog Devices, Linear Technology, Maxim. You needed a score card to know which analog geniuses were working where, at any given time. It’s not a big surprise to see some recombination happening.

  7. I don’t understand anything Maxim’s doing, they just bought Trinamic, only to be bought by AD? wtf?

    Also I tipped Hackaday a month ago on that other acquisition but it never got reported on, I’d though it’d interest the community as well since it’s become ubiquitous to include Trinamic chips in anything that uses steppers.

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