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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. 

Analog ICs Top 10 Industrial SemiConductor Suppliers 2019 barchart

 

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. 

 

Combined ADI - MXIM portfolio by device category pie chart

 

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. 

 

Market Share of Top 10 Industrial Semiconductor Suppliers 2019 barchart highlighting ADI-MXIM

 

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. 

 

ADI and MXIM will dominate the market share in several application field categories.

 

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.