TI, which makes low-power chips, said it would combine its 30,000 analog products and advanced manufacturing capabilities with the offerings of National Semiconductor, which makes analog integrated circuits.
National will bring 12,000 analog products to the joint product portfolio. On the close of the deal, National will become a part of TI's analog segment. Sales of analog semiconductors will represent almost 50 percent of TI's revenue, the companies said in a joint statement.
Analog semiconductors convert analog data into digital signals in smartphones, PCs and many other devices.
"This acquisition is about strength and growth," said Rich Templeton, TI's chairman, president and chief executive officer, in the statement. Each company has unique strengths in delivering products to improve performance and efficiency and convert real-world signals in electronic systems, the companies said.
The acquisition is subject to customary closing conditions and is expected to close in six to nine months, they said.
If the acquisition is completed, TI will have a stronger foothold in a market in which it already is a leader, said Nathan Brookwood, principal analyst at Insight 64. The acquisition could provide new growth opportunities and an extended market presence for products made by National Semiconductor, which over the years has tried a variety of tactics to grow its business.
"These are both names that have been a part of the semiconductor industry since the days the industry got created" decades ago, Brookwood said.
The analog semiconductor market has always been an exclusive club of a few companies, Brookwood said. The acquisition could help contract the market into a few players that includes Linear Technology and NXP Semiconductor.