ON JULY 13, 2020 ANALOG DEVICES (Nasdaq: ADI), THE 2ND LARGEST INDUSTRIAL SEMICONDUCTOR COMPANY, ANNOUNCED IT HAS ENTERED INTO A DEFINITIVE AGREEMENT TO ACQUIRE MAXIM INTEGRATED (Nasdaq: MXIM), THE 21ST LARGEST, IN A DEAL VALUED AT APPROXIMATELY $21 BILLION.
In the industrial space, the acquisition allows ADI to gain ground on market leader Texas Instruments (TI) in several key device categories, particularly in analog integrated circuits (ICs) - a category that includes devices such as amplifiers and comparators, voltage regulators and references, data converters, interface, and analog application-specific ICs (ASICs). The merged ADI-MXIM will relegate TI to second place in the industrial analog ICs market, capturing approximately 35% market share. Previously ADI was ranked second and Maxim third in this category.
ADI is already the industrial semiconductor market leader in data converters and amplifiers & comparators. Both ADI and Maxim have strong portfolios of general-purpose analog interface devices and voltage regulators, although there is little overlap since they target different applications.
As shown above, in the industrial space the combined ADI-MXIM will be overwhelmingly an analog company, although there are strengths in other segments, too.
ADI has a strong microcomponent portfolio with its Blackfin embedded processors, SHARC® DSPs, and ARM7-based MCUs. ADI also leads the industrial segment market in the Sensors & Actuators segment with MEMS-based accelerometers and gyroscopes.
Maxim offers interface expertise in IO-Link and Ethernet products, security products such as its DeepCover® family of cryptographic devices, and a range of low-power MCUs and sensors for wearable medical applications.
Looking at the general industrial semiconductor market, the combined company would have generated $3.6 billion in industrial semiconductor revenue in 2019, which equates to roughly 7% of the overall global industrial semiconductor market.
In industrial application fields, ADI already dominates the Test & Measurement market with its strength in data converters, but the combined company will gain market share in several categories, with improved rankings in Manufacturing and Process Automation, Building & Home Control, Security & Video Surveillance, and Lighting.
In manufacturing and process automation, Maxim Integrated will bring its expertise in industrial networking, control, motor drive segment; building safety, climate control in Building & Home Control; network cameras in security and video surveillance and broaden opportunities in various lighting applications. ADI will benefit from Maxim’s proficiency in Logic application-specific ICs in applications such as industrial networking, smart metering, and medical imaging.