Texas Instruments Is Paying 9.6x Revenue for Silicon Labs
The acquisition expands TI’s embedded AI footprint while tying the payoff to internal fabrication.
Texas Instruments has agreed to acquire Silicon Labs for $231 per share in cash, valuing the transaction at approximately $7.5 billion. The offer represents about a 69% premium to Silicon Labs’ unaffected share price, and the companies expect the deal to close in the first half of 2027. Texas Instruments has projected approximately $450 million in annual manufacturing and operational synergies within three years of closing.
The transaction is Texas Instruments’ largest acquisition since its $6.5 billion purchase of National Semiconductor in 2011. The agreement includes termination fees of $259 million for Silicon Labs and $499 million for Texas Instruments. Public reporting indicates the acquisition will be financed with cash on hand and debt.
Texas Instruments has tied the projected $450 million in annual savings to manufacturing and operational efficiencies, including plans to internalize Silicon Labs’ production into Texas Instruments’ fabrication facilities.
A 69% Premium at 9.6x Sales
Silicon Labs reported fiscal 2025 revenue of approximately $784 million, including about $208 million in fourth-quarter revenue, with GAAP gross margins of roughly 58% and revenue growth of approximately 34% year over year.
At a $7.5 billion transaction value and approximately $784 million in trailing revenue, the implied enterprise value-to-revenue multiple is about 9.6 times revenue. The projected $450 million in annual synergies equals roughly 57% of Silicon Labs’ fiscal 2025 revenue.
Texas Instruments reported fiscal 2025 revenue of approximately $17.7 billion and gross margins near 57%. The company generated about $7.2 billion in operating cash flow and roughly $2.9 billion in free cash flow, with capital expenditures of approximately $4.6 billion during the year.
The $7.5 billion purchase price equals roughly 42% of Texas Instruments’ fiscal 2025 revenue. It represents the company’s largest transaction in more than a decade and a material capital deployment relative to annual free cash flow.
Following the announcement, Silicon Labs shares rose sharply while Texas Instruments shares declined modestly.
The $450 Million Target
Texas Instruments has been expanding its internal manufacturing footprint, including investments in 300mm wafer fabrication facilities. In 2024, the company announced a preliminary agreement to receive up to $1.6 billion in proposed funding under the CHIPS and Science Act to support semiconductor manufacturing investments in Texas and Utah.
In its most recent annual reporting, Texas Instruments disclosed elevated capital expenditures tied to expanding internal manufacturing capacity.
The projected $450 million in annual manufacturing and operational synergies are expected within three years after closing, and reporting links those savings to migrating Silicon Labs’ production into Texas Instruments’ fabrication facilities.
Silicon Labs’ portfolio centers on embedded wireless connectivity used in industrial, consumer, and IoT applications, according to company disclosures and deal coverage.
Texas Instruments’ revenue base remains concentrated in analog and embedded processing segments; in fiscal 2025, analog products accounted for the majority of company revenue.
The transaction remains subject to regulatory approvals and is expected to close in the first half of 2027.
Key Takeaways
- Texas Instruments acquires Silicon Labs for $7.5 billion, paying $231 per share.
- The deal offers a 69% premium over Silicon Labs' unaffected share price.
- Texas Instruments expects $450 million in annual synergies from internal manufacturing efficiencies.
- This acquisition marks TI's largest since the 2011 purchase of National Semiconductor.
- The transaction is valued at 9.6 times Silicon Labs' trailing revenue.