Will China block Analog Devices' growth aspirations?

July 14, 2020 //By Peter Clarke
Will China block Analog Devices' growth aspirations?
Analog Devices' proposed acquisition of Maxim Integrated Products, will not worry Texas Instruments, the world's leading analog IC provider, but may fall foul of China.

The agreed acquisition, for about $21 billion, was announced Monday (see Analog Devices to pay $21 billion to take over Maxim).

Texas Instruments was the top analog IC vendor in 2019 with $10 billion of business, almost twice the sales of its nearest competitor, according to IC Insights Inc. (see Texas Instruments stays on top of analog chip ranking). Analog Devices ranked second with about $5.2 billion of analog sales in 2019 but Maxim ranked seventh with $1.85 billion. Third ranked was Infineon Technologies with $3.75 billion.

The acquisition of Maxim will reinforce Analog Devices' position as second-ranked analog IC supplier without changing the top five ranking.

The deal is still subject to US and certain non-US regulatory approvals as well as by the shareholders of both companies. The premium Analog was prepared to pay above the Maxim stock price was not that great but given approval by both boards of directors it would seem that stockholders will generally take to the deal, although such a large deal could take a year to close and a lot can happen over such a period of time.

It was notable that Qualcomm's intended acquisition of NXP Semiconductors back in 2017 was one such major deal that never happened.

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