Texas Instruments has agreed to acquire Silicon Laboratories in an all-cash deal valued at $7.5 billion, marking its largest acquisition in more than a decade. The move is aimed at strengthening Texas Instruments’ position in wireless connectivity chips, which are widely used in industrial equipment, smart homes, and consumer electronics.
Under the agreement, Texas Instruments will pay $231 per share in cash, representing a premium of about 69% over Silicon Labs’ last unaffected share price. Following reports of the deal, Silicon Labs’ stock jumped sharply, reaching its highest level in nearly four years.
Texas Instruments plans to fund the acquisition using a mix of cash on hand and debt. The company expects the deal to deliver around $450 million in annual manufacturing and operational savings within three years of closing.
The transaction is expected to close in the first half of 2027, subject to regulatory approvals and customary conditions. As part of the agreement, Silicon Labs would pay a $259 million breakup fee if it exits the deal, while Texas Instruments would owe $499 million if it walks away.
Goldman Sachs is acting as the exclusive financial adviser to Texas Instruments.
The transaction is expected to close in the first half of 2027, subject to receipt of regulatory approvals and other customary closing conditions, including approval by Silicon Labs stockholders.
“The acquisition of Silicon Labs is a significant milestone that strengthens our long-term embedded processing strategy. Silicon Labs’ leading embedded wireless connectivity portfolio enhances our technology and IP, enabling greater scale and better serving our customers. Texas Instruments’ industry-leading and internally owned technology and manufacturing is optimised for Silicon Labs’ portfolio, and will provide customers with a dependable supply worldwide,” said Haviv Ilan, chairman, president and chief executive officer of Texas Instruments.
Ilan adds, “Together, we can do more. The Texas Instruments and Silicon Labs teams share a high-performing culture focused on excellence, engineering and innovation, and I am highly confident this transaction positions the combined company to deliver sustained value creation for Texas Instruments’ shareholders.”
Expanding beyond core analogue chips
Texas Instruments is best known for its analogue and embedded chips that manage power and signals in everyday devices such as smartphones, cars, factory equipment, and medical systems. Its customer base includes major global names such as Apple, Ford Motor Company, and SpaceX.
According to the company, the Silicon Labs acquisition adds a strong wireless connectivity layer to TI’s portfolio, enabling it to combine its analogue expertise with low-power wireless technologies used in connected devices.
Analysts say the deal could create one of the most competitive portfolios of wireless and analogue chips in the industry, particularly for industrial and Internet of Things applications.
A refocused Silicon Labs
Silicon Labs has spent recent years narrowing its focus on connectivity chips. In 2021, the company sold parts of its automotive and infrastructure chip business to Skyworks Solutions for $2.75 billion.
Since then, it has focused on chips for smart meters, industrial automation, and smart home devices. That focus now closely aligns with Texas Instruments’ long-term strategy of serving stable, high-volume markets rather than chasing volatile demand tied to advanced AI processors, the report adds.
“Texas Instruments and Silicon Labs share a strong Texas heritage and a long-term commitment to building technology companies the right way. Over the last decade, Silicon Labs has delivered double-digit growth, driven by the accelerating demand for more connected devices. The opportunity ahead is significant for both Texas Instruments and Silicon Labs. By combining our embedded wireless connectivity portfolio with Texas Instruments’ scale, technology and manufacturing capabilities, we will be positioned to serve more customers and accelerate innovation,” said Matt Johnson, president and CEO of Silicon Labs
