Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (2863)	2/14/2006 1:04:56 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 2882

Analog Chip Market Could Be Rife For M&A -Analyst Report DOW JONES NEWSWIRES February 13, 2006 11:08 a.m. By Donna Fuscaldo Over the years, the analog semiconductor market hasn't been a hotbed of merger and acquisition activity. After all, analog chip companies were never in dire need of a shakeup to keep the industry humming along. But the recent sale of Dallas-based Texas Instruments Inc.'s (TXN) sensors and control unit for $3 billion has prompted at least one analyst to predict an increase in deal making for companies that make general purpose or analog chips. "We believe that the industry view of consolidation as a taboo is changing because acquisitions done over the past five years are showing merit," wrote Lehman Brothers analyst Romit Shah in a research report Monday. He pointed to Intersil Corp. (ISIL), which bought Xicor in 2004, as one analog chip maker that is now on the path to becoming one of the fastest-growing analog companies this year. As analog chip companies focus more of their attention on growth, increased M&A will follow, he said. The way Shah sees it, the analog chip market is seeing long-term growth moderate as more competition comes on board. The industry is also seeing slower growth because their chips are used more and more in consumer applications, which are associated with lower prices. With little chances that the industry will return to the days of double-digit organic growth, acquisitions could be a way to change that. What's more, Shah said analog chip companies like Texas Instruments have a lot of cash on their balance sheets, which they could use for buys. According to the analyst, the analog chip sector as a whole has about $20 billion in cash and short-term investments. And while Shah is not privy to deals that could be in the works, he said TI's recent unit sale and Analog Devices Inc.'s (ADI) decision to eliminate its poison pill is driving the M&A speculation.