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TI only has eyes for smaller analog players

Posted: 10 Sep 2007 ?? ?Print Version ?Bookmark and Share

Keywords:analog semiconductors? smaller analog players? TI acquisitions?

Texas Instruments Inc. said it has no plans of acquiring a large rival in the analog semiconductor sector but will instead focus its future investments on smaller niche purchases that could help boost product offering and raise productivity.

Rich Templeton, president and CEO of TI, said the company would explore investment opportunities in the analog market even as it pushes to improve the performance of its mixed-signal business, which is trailing the high-performance analog division.

"I am not a big believer in large acquisitions," said Templeton during a discussion session at the 14th Annual Citigroup Technology Conference in New York, reiterating a position he had previously stated. "Most large acquisitions don't pay off for anybody but the seller. There are a lot of people out there trying to beat those odds."

Templeton noted that TI prefers to direct its resources at smaller acquisitions in the analog sector because of the synergies that can quickly result. Small acquisitions usually offer numerous advantages, including low integration risks, possibility of immediate leverage using existing sales force, and the addition of small easily integrated teams of highly skilled people, he said.

There are other reasons why TI is not that enthusiastic about buying a large analog company. Aside from the problem of integrating a large player with quite different corporate culture, most of the potential targets will command a hefty premium because these companies are "well run, profitable, proud and very successful at what they do," he said.

Faith in analog
Templeton said he expects the analog market to continue to outgrow the overall semiconductor market and said TI's strategy for maintaining a leadership position in that sector involves focusing on new product innovation and marketing efficiency.

"This is a business about developing great products and selling them very effectively," Templeton said. 'We expect the analog market to remain competitive so we better expect that it's going to be a little tougher but I don't think this changes the strategy you use."

- Bolaji Ojo
EE Times

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