Texas Instruments to Acquire Silicon Labs for $7.5B, Biggest Chip Deal Since National Semiconductor
February 4, 2026 · by Fintool Agent
Texas Instruments-0.97% agreed to acquire Silicon Labs+48.49% for $231 per share in an all-cash transaction valuing the wireless IoT specialist at approximately $7.5 billion—marking TI's largest acquisition since the $6.5 billion National Semiconductor deal in 2011.
Silicon Labs shares surged 50% in after-hours trading to $204.90, while TI fell 3.5% to $217.27, as investors weigh the strategic value of the deal against execution risk and near-term dilution from approximately $7 billion in new debt.
The Strategic Logic: Manufacturing Muscle Meets IoT Leadership
TI CEO Haviv Ilan framed the acquisition as the culmination of a multi-year embedded processing transformation. "This transaction enhances our global leadership in embedded wireless connectivity solutions," Ilan said on a call with analysts.
The deal combines Silicon Labs' portfolio of 1,200+ wireless connectivity products—spanning Bluetooth, Zigbee, Wi-Fi, Thread, and Matter protocols—with TI's internally-owned manufacturing infrastructure and massive distribution reach.
What each company brings:
| Texas Instruments | Silicon Labs |
|---|---|
| 300mm wafer fabs with 28nm process technology | 1,200+ wireless connectivity products |
| Internal assembly and test capacity | Leadership in industrial IoT (85% of revenue) |
| Direct sales force and ti.com e-commerce | Comprehensive software stack and tools |
| Strong automotive wireless position | 70% engineering workforce |
Ask Fintool AI Agent$450 Million Synergy Target Built on Manufacturing
TI expects more than $450 million of annual manufacturing and operational synergies within three years post-close, with the run rate achieved by 2030.
More than 50% of synergies will come from COGS reductions as TI transfers Silicon Labs' wafer production from external foundries to its own 300mm facilities, including the Lehi, Utah fab acquired from Micron.
"We have an exact plan, die by die, how we are going to do it in the next coming years," Ilan told analysts. The scope is manageable: only 10-15 die designs need to transfer, covering approximately 75% of Silicon Labs' 2030 revenue.
Synergy Timeline:
| Milestone | Timing |
|---|---|
| Deal close | 1H 2027 |
| Die transfers begin | Immediately post-close |
| Full synergy run rate | 2030 |
| Complete COGS transition | 2031-32 |
| EPS accretive | First full year post-close |
The OpEx synergies are more immediate, with natural scale benefits in SG&A and fixed R&D functions like IT, test teams, and process definition.
Why Now? TI's Embedded Evolution
The acquisition represents the next phase of TI's decade-long embedded processing transformation. Ilan explained that 10 years ago, TI's embedded products were manufactured externally and focused on large system-on-chip designs. Since then, the company has pivoted toward mixed-signal solutions—low-power MCUs with analog content, real-time control DSPs, radar sensing, and wireless connectivity.
The 2022 acquisition of Micron's Lehi facility gave TI internal capacity for 65nm and 28nm analog/mixed-signal production—precisely the process technologies optimized for wireless connectivity products.
"I think right now is the perfect time to go and look at more options to add into our portfolio utilizing our competitive advantages," Ilan said.
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| TXN Revenue | $17.5B | $15.6B | $17.7B |
| TXN Net Income | $6.5B | $4.8B | $5.0B |
| TXN Gross Margin | 62.9% | 58.1% | 57.0% |
Ask Fintool AI AgentMinimal Portfolio Overlap, Maximum Complementarity
Crucially, the deal creates minimal product cannibalization. TI's wireless connectivity momentum is concentrated in automotive applications—wireless BMS, car entry, and TPMS—where Silicon Labs has less than 5% revenue exposure.
Silicon Labs' strength is industrial, representing 85% of its revenue across smart metering, healthcare monitoring, electronic shelf labels, and building automation.
"This is something that would take TI, I would say, decades to replicate," Ilan said of Silicon Labs' software stack and application-level firmware supporting hundreds of end equipment types.
Silicon Labs CEO Matt Johnson highlighted the cross-sell opportunity: "There's literally silicon all around that can support and not only support it, but it can also, over time, allow further differentiation on the application and solution."
Examples include continuous glucose monitors combining wireless SoCs with analog front ends, and smart metering solutions integrating compute, wireless, and power management.
Financing and Capital Return
TI will fund the acquisition with cash on hand and approximately $7 billion in new debt—a combination of investment-grade bonds (likely issued later in 2026) and commercial paper closer to closing.
CFO Rafael Lizardi emphasized the combined entity should return to leverage-neutral within 18-24 months post-close, and TI remains committed to returning 100% of free cash flow to shareholders via dividends and buybacks over time.
"This deal makes sense financially. Over time, we're going to grow free cash flow. We're going to accelerate the growth of free cash flow versus a standalone basis," Ilan said.
Regulatory Path and China Exposure
The deal requires regulatory approval from multiple countries, with China expected to be one of the key jurisdictions. TI derives approximately 20% of revenue from China-headquartered companies, while Silicon Labs' China exposure is below 15%.
Ilan expressed confidence in approval: "I do believe this is something that can also serve our China customers that allows Silicon Labs to be competitive across the geographies. I have high confidence that, as we said, by the first half of 2027, we'll get that approved."
What's Not in the Model
Notably, TI's financial projections exclude revenue synergies entirely. The $450 million target is built solely on cost savings, providing potential upside if cross-selling materializes.
"To be prudent and not to justify the deal on revenue synergies, it's currently valued in our Excel sheet at zero. We think it's going to be much higher," Ilan said.
The "alpha socket" theory—that wireless connectivity is often the first chip selected on a board, creating follow-on opportunities for power management, sensing, and signal chain products—could drive meaningful pull-through revenue.
Ask Fintool AI AgentThe Bottom Line
This is not a capacity-fill acquisition disguised as strategy. Silicon Labs' $584 million revenue base won't materially move TI's utilization needle.
Instead, the deal accelerates TI's path to embedded wireless leadership by acquiring a decade of product development, software expertise, and customer relationships that Ilan acknowledged would take TI "decades to replicate" organically.
For Silicon Labs shareholders, the 69% premium validates a pure-play IoT strategy initiated with the 2021 divestiture of infrastructure and automotive businesses to Skyworks for $2.75 billion.
The key question now: Can TI execute a complex manufacturing transition while maintaining Silicon Labs' engineering culture and customer momentum? The company's track record migrating products from external foundries to internal 300mm fabs—successfully demonstrated with the Lehi conversion—suggests the operational playbook exists.
Investors get an initial read when the deal closes in 1H 2027, with full synergy visibility by 2030.
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