Texas Instruments agreed to acquire Silicon Labs in a $7.5 billion all-cash transaction at $231 per share, aiming to leverage its recent 300 mm wafer fabs in Sherman and Lehi, Utah. This deal provides immediate volume to operate the fabs at capacity and secures a new revenue stream focused on wireless connectivity for IoT applications.

In Q4, revenue increased 10% to $4.42 billion while EPS reached $1.27, slightly below estimates. The data center segment saw approximately 70% year-over-year growth driven by AI infrastructure demand, offsetting slower recovery in industrial and automotive businesses and supporting first-quarter guidance of $4.32 billion to $4.68 billion.

The shift of Silicon Labs production into internal 300 mm fabs is expected to reduce unit costs by about 40% and generate $450 million in annual savings within three years. This reshoring strategy enhances manufacturing efficiency by utilizing larger wafers and consolidating production volumes under one roof.

Free cash flow surged 96% to $2.9 billion in 2025 as capital expenditures peaked at $4.6 billion and are forecast to fall to $2 billion to $3 billion in 2026. A 35% investment tax credit under the U.S. CHIPS Act further reduces equipment and construction costs, reinforcing dividend security and debt reduction plans.