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In a caught move Wall Street By surprise, the semiconductor giant Texas Instruments (TI) revealed that it is acquisitionSilicon Laboratories. This news comes a week after TI announced its fourth-quarter earnings on January 27, and coincides with Silicon Labs’ fourth-quarter report, which was released on February 4.
After the acquisition, TI stock fell about 2% on the day, while… slab rose 49% It reached a new 52-week high of $207.50 and closed at $203.41.
The move signals a major turnaround for TI, known for its industry-leading analog and embedded processing chips. Although you may know the company as the maker of the calculator you used in school, today it has transformed into the backbone of industrial energy and automobiles.
Meanwhile, SLAB offers a world-class wireless communications portfolio for the Internet of Things (IoT), with customers such as Samsung, Google and Amazon.
Texas Instruments: Enhancing “Connectivity” in Communication
For many years, Texas Instruments has been a trusted name in the analog chip market. Now, as everything (i.e. your smart watch, headphones, health monitor, or robot vacuum cleaner) is increasingly connected, the low-power communications needs of the Internet of Things have also risen.
According to data from Fortune Business Insightsthe global wearable medical devices market size, valued at $103.04 billion in 2025, is expected to grow at a CAGR of 20%. This translates to $117.41 billion in 2026 to $505.28 billion by 2034.
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In addition, North America currently dominates this market by 45.70%. market share As of 2025. These devices range from health and activity trackers to smartwatches used to collect real-time data on health and fitness.
The acquisition is therefore timely, and TI hopes it will add significantly to its combined revenues and existing customer base.
Acquisition of Texas Instruments-Silicon Labs
Under the deal, Texas Instruments will pay $231 per share To Silicon Labs, in a cash transaction of $7.5 billion. The transaction is expected to close in the first half of 2027, pending regulatory and shareholder approval.
SLAB specializes in this field; Its chips allow electronics to communicate securely via Bluetooth, Wi-Fi, and ZigBee while consuming minimal battery power. With the acquisition, TI will be able to offer its customers a fully integrated solution that includes the chips that power the device, as well as wireless technology to connect it to the cloud.
This deal will add around 1200 new products to TI’s existing portfolio, which supports “a variety of wireless communication standards and protocols.”
As such, TI expects the transaction to strengthen the company’s position Earnings per shareand is committed to 100% returns Free cash flow To shareholders over time earnings And buy back shares, regardless of the size of the deal.
Additionally, TI expects to “generate $450 million in annual manufacturing and operational synergies within three years after closing.” One way is to move SLAB’s existing manufacturing back to its 300mm wafer facilities in the US, ensuring “widely available low-cost capacity for Silicon Lab products”.
Claims accompany SLAB Earnings reportwhich posted a strong quarter and increases in both revenue streams.
SLAB’s Q4 Earnings Highlights:
- the totalprofit: $785 million, an increase of 34% year-on-year
- Industrial and commercial revenues: $445 million, an increase of 31%
- Home and life income: $340 million, an increase of 38%
While it has benefited most from the growing industrial use of wireless communications, home appliance revenues have not been far behind.
- GAAP diluted EPS was $1.98.
- Gross margin was 58.2%.
- Total GAAP operating expenses were $528 million and operating loss was $71 million, but non-GAAP Operating income It was positive $25 million.
Analyst sentiment
After the news, analysts said… Needham Silicone Laboratories reduced to He catches from He buys He removed the $150 price target. The company believes Texas Instruments is “uniquely positioned to generate significant deal synergies” through this acquisition and does not anticipate any additional bidders, according to The fly.
Standard SLAB’s rating was also downgraded to He catches from He buys After the acquisition, removing the $160 price target. The company sees the deal as beneficial for both companies, noting that TI has gained “a unique growth business that would have taken years to attempt to develop on its own.” It reiterated a buy rating and $250 price target on Texas Instruments, adding that it does not expect any outside suitors to bid higher than that. The fly I mentioned.
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