Texas Instruments Announces Plan to Buy Chipmaker Burr-Brown

Making good its intention to move heavily into the ever-expanding consumer-electronics market, Texas Instruments has announced that it will acquire chipmaker Burr-Brown Corporation for $7.6 billion in stock. Burr-Brown makes some of the most highly regarded A/D and D/A converter chips on the market, many of them used in high-end audio and home-theater products.

Expected to be completed in September, the acquisition, announced June 21, is the latest by TI in a series that includes analog power-control chipmaker Unitrode Corporation, acquired last summer, and power-chip maker Power Trends, acquired last November. The announcement of the impending purchase caused Tuscon, Arizona–based Burr-Brown's stock to soar 40% in after-hours trading.

About 24% of Burr-Brown's revenue comes from chips for consumer electronics such as digital audio and video products. The company makes Direct Stream Digital DACs for SACD players, two-channel 24-bit/192kHz DACs for DVD players, and six-channel high-resolution DACs for surround-sound applications. Some of B-B's products approach the theoretical limit for signal-to-noise specifications.

One reason TI wants B-B is because it has an expert team of analog chip designers, news reports stated. TI vice president Richard Templeton said the merger could allow his company to more than quadruple the number of analog chips it markets this year over last year. "The markets they are in have very little overlap with where we are," Templeton told the Wall Street Journal. "That was a key element . . . to make this work."

The deal will make TI the third-largest maker of amplifier chips, after National Semiconductor and Analog Devices. Continuing its roll: On June 23, two days after news of the Burr-Brown deal was released, TI announced a $300 million acquisition of Alantro Communications, a developer of wireless local-area-networking technology.