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Stock Analyst Update

Texas Instruments Pays Big Bucks for Chipmaker

Burr-Brown acquisition makes the firm the undisputed champ in analog market.

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Although it is paying through the nose, Texas Instruments' (TXN) acquisition of analog chipmaker Burr-Brown (BBRC) makes good strategic sense. But the deal isn't monumental for Texas Instruments, given that the firm is so much larger than Burr-Brown.

If nothing else, the $7.6 billion purchase of Burr-Brown makes it harder for Texas Instruments' competitors to get up in the morning. With almost $8 billion in semiconductor sales in 1999, Texas Instruments is undoubtedly a gorilla in the industry. The company is the worldwide leader in digital signal processors, or DSPs, with close to 50% market share of the $4.4 billion market in 1999. DSPs are best known for their use in cellular phones, one of the fastest-growing markets in the technology sector.

Jeremy Lopez does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.