Texas Instruments to Buy Silicon Laboratories for $7.5B at $231 Share
Texas Instruments agreed to acquire Silicon Laboratories in an all-cash deal valuing it at $7.5 billion, or $231 per share, to secure high-volume IoT products for its 300mm fabs. Management forecasts $450 million in annual savings within three years by shifting SLAB’s production internally and leveraging AI-driven data center demand.
1. Deal Terms and Valuation
Texas Instruments will acquire Silicon Laboratories in an all-cash transaction at $231 per share, valuing the deal at approximately $7.5 billion. This price represents a significant premium over SLAB’s recent trading levels and underscores TI’s commitment to filling its new high-capacity fabs.
2. Production Transfer to 300mm Fabs
Under the agreement, Silicon Laboratories’ wireless connectivity and IoT chip production will be moved from external foundries into TI’s 300mm fabrication facilities in Sherman, Texas, and Lehi, Utah. This shift aims to maximize wafer utilization and lower per-chip manufacturing costs by roughly 40%.
3. Projected Savings and Financial Impact
TI management projects the integration will yield $450 million in run-rate annual savings within three years through reduced wafer costs, streamlined operations, and elimination of external foundry fees. These savings are expected to boost free cash flow and support dividend and buyback programs.
4. AI-Driven Demand Catalyst
The acquisition coincides with a surge in data center demand driven by artificial intelligence infrastructure build-outs, where power management chips are essential. By absorbing SLAB’s IoT portfolio, TI positions itself to capture both industrial and AI server growth, providing diversified volume for its fabs.