6 ms·

TI buys National Semiconductor for $6.5B

81 points by ubasu 16y ago

deleted 16y ago
[deleted]
ihodes 16y ago
Very cool news. However, I see something like this and I wonder: "wow, Facebook is valued at over 10 times this purchase price (which is already inflated by virtue of it being a purchasing price)." I don't know what to draw from that; intuitively I see less value in Facebook, but I certainly haven't done an in-depth analysis.
- spitfire 16y ago
  Nat semi has a known value and track record. Facebook doesn't have a known value/track record. Same with all these doctoms that give away things for free. The second they start charging they put a cap on their value. With facebook you're paying for future potential. That's the reasoning, whether you agree with it or not.
  - ihodes 16y ago
    I do understand that argument; that much is clear (and I was not!). However, I think one would have to be dishonest with oneself if one didn't think the valuation was overinflated.
    - spitfire 16y ago
      Agreed. But silicon valley seems to have its own reality distortion field around it.
  - mlinsey 16y ago
    Your post seems to be implying that Facebook hasn't found a business model, and that a day of reckoning will come "the second they start charging". However, Facebook is already charging for advertisements, that's how they earned about $355 million in profits in the first 3/4 of 2010: http://nymag.com/daily/intel/2011/01/goldmans_leaked_details_on_fac.html http://nymag.com/daily/intel/2011/01/goldmans_leaked_details... In contrast, National Semiconductor earned about $220 million in profits for approximately the same period: http://www.google.com/finance?client=ob&q=NYSE:NSM http://www.google.com/finance?client=ob&q=NYSE:NSM (not exactly the same months, because their Q1 goes from Dec-Feb, but still a useful point of comparison) One can make the case that Facebook is overvalued, perhaps even grossly overvalued, but to say that it should be valued at less than National Semiconductor is a big stretch, even if you are very conservative and use only current bottom-line financials. In my experience, those who make such statements are not basing their opinion on fundamentals of the companies, but on an opinion that companies like National Semiconductor do "real" engineering as opposed to "frivolous" social networking sites like Facebook. It's discouraging to see such attitudes, but they are not new: both early internet companies (including ones that survived the bubble and turned out to be sound companies) as well as early PC-era companies were also derided as toys or fads.
    - alain94040 16y ago
      Exactly. I have no doubt that Facebook's profits could easily triple in the next two years. For National Semi, I wouldn't bet on it :-) So yes, a somewhat larger valuation for Facebook than National sounds reasonable. So, $6B -> $15B, $20B.
- philthy 16y ago
  I would say that it is definitely a power or over buy. I would agree that the purchasing price could be a good bit lower. Now I'm not trying to demean Nat in anyway they are in no way a garage operation, but they have not been doing that well in the past few years. I don't know if it is a downturn in markets or competition but their stock price isn't where it was 5 years ago. http://www.google.com/finance?q=National+Semiconductor&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&sa=N&hl=en&tab=we http://www.google.com/finance?q=National+Semiconductor&o... But it sure as hell will be tomorrow look at that after hours!
reemrevnivek 16y ago
TI's press release page is here: http://www.ti.com/acquire http://www.ti.com/acquire The blog post is here: http://e2e.ti.com/blogs_/b/realworld/archive/2011/04/04/ti-to-acquire-national.aspx http://e2e.ti.com/blogs_/b/realworld/archive/2011/04/04/ti-t... (The first is basically the outline of the second...) The statement, "TI, which makes low-power chips, said..." is a huge understatement. TI dabbles in every area of electronics. Their 30,000 analog parts are supplemented by >70,000 other parts, and that number only accounts for parts which are available from Digikey.
JaymeHoffman 16y ago
This is awesome for TI! It is pretty crazy that Facebook is valued over 10 times this but if we didn't have facebook we wouldn't have likes, pokes or farmville...... If we didn't have Semiconductors we might not have Facebook. Strange world indeed! "Like" it though.
- hugh3 16y ago
  If we didn't have Semiconductors we might not have Facebook. And if we didn't have sand we wouldn't have semiconductors, but I still ain't buying up the Gobi Desert.
  - JaymeHoffman 16y ago
    YES!
tomkinstinch 16y ago
Why aren't there greater anti-trust concerns over this?
- sliverstorm 16y ago
  I can't speak for everyone, but while I'm a little saddened by this, I'm too busy being optimistic about the future to get worried about anti-trust. NatSemi makes good chips, but everything else seemed a little shaky (have you seen some of their newer datasheets...?) and I hope being owned by TI will help a lot of these things.
  - chrisjsmith 16y ago
    Agreed on that part. Also MultiSim is damn expensive. TI are usually cheaper on tooling and software support.
- HeyLaughingBoy 16y ago
  The market's diverse enough so it's not likely to be an issue. TI and National don't have a corner on any part of the market that I'm aware of. There's plenty of competition from the likes of Analog Devices, Maxim, Freescale, Siemens (not sure if Siemens is still in the IC market, tho) etc...
  - reemrevnivek 16y ago
    You missed the very significant names of Linear, NXP, ST, Fairchild, and On Semi (for the analog market). Regardless, TI is bigger than any of those companies, and probably bigger than all of those companies combined.
  - tomkinstinch 16y ago
    TI is definitely the largest player. Why shouldn't market consolidation by TI be questioned? Diversity may also be misperceived, as the companies may not compete directly on all product lines. If you need a chip for something, there are times when it is only produced by one company. Here are a few quickly-Googled numbers: TI Revenue: $13.966 billion Net Income: $3.228 billion ST Microelectronics Revenue: $8.465 billion Net Income: $1.131 billion NXP Semiconductors Revenue: $5.44 billion Net Income: $1.823 billion Infineon (Siemens) Revenue:$4.688 billion Net Income: $937 million Freescale Revenue: $4.46 billion Net Income: $1.15 billion Analog Devices Revenue: $2.8 billion Net Income: $712 million ON Semiconductor Revenue: $2.131 billion Net income: $395.8 million Maxim Revenue: $1.998 billion Net Income: $129 million Fairchild Semiconductor Revenue: $1.6 billion Net Income: $193 million National Semiconductor Revenue: $1.42 billion Net Income: $209.2 million Linear Technology Corp. Revenue: $1.17 billion Net income: $361 million The US used to have a consistent anti-trust tradition. With Ma Bell reuniting and mergers like this, it seems to be waning.
Montagist 16y ago
I think they also may be going for some of the maker market as well.
ck2 16y ago
Is this good or bad for the future of ARM cpu/chipsets?
- reemrevnivek 16y ago
  It's irrelevant: National doesn't make many microcontrollers, much less CPUs. They've got a few small, overpriced 8- and 16-bitters (think garage door opener, not smartphone) running proprietary cores, but those are not very popular. (And they've reassured us that they won't discontinue this stuff anytime soon, though I think that it's high time to start looking elsewhere if you depend on National's microcontrollers...) This does have an impact, though, on the support components which are necessary to build a motherboard - voltage regulators, sensors, diodes, transistors, glue logic, level translators, etc. National and TI used to be competitors in that arena, now they're on the same team.
chrisjsmith 16y ago
I see a lot of people saying "ooh facebook is valued 10x" that but you have to look at history. Facebook does NOTHING for ANYONE really other than a) support a number of people piggy-backing on it to make some cash b) keeps VC's occupied and salivating over their new Ferrari's and whores and c) violates everyone's right to privacy to the highest bidder. NI/TI produce REAL, IMPORTANT devices and platforms which a large quantity of the world runs on that keeps you dry, transported, fed, sheltered and entertained.

81 points by ubasu 16y ago

deleted 16y ago

[deleted]

Very cool news. However, I see something like this and I wonder: "wow, Facebook is valued at over 10 times this purchase price (which is already inflated by virtue of it being a purchasing price)." I don't know what to draw from that; intuitively I see less value in Facebook, but I certainly haven't done an in-depth analysis.

spitfire 16y ago
Nat semi has a known value and track record. Facebook doesn't have a known value/track record. Same with all these doctoms that give away things for free. The second they start charging they put a cap on their value. With facebook you're paying for future potential. That's the reasoning, whether you agree with it or not.
- ihodes 16y ago
  I do understand that argument; that much is clear (and I was not!). However, I think one would have to be dishonest with oneself if one didn't think the valuation was overinflated.
  - spitfire 16y ago
    Agreed. But silicon valley seems to have its own reality distortion field around it.
- mlinsey 16y ago
  Your post seems to be implying that Facebook hasn't found a business model, and that a day of reckoning will come "the second they start charging". However, Facebook is already charging for advertisements, that's how they earned about $355 million in profits in the first 3/4 of 2010: http://nymag.com/daily/intel/2011/01/goldmans_leaked_details_on_fac.html http://nymag.com/daily/intel/2011/01/goldmans_leaked_details... In contrast, National Semiconductor earned about $220 million in profits for approximately the same period: http://www.google.com/finance?client=ob&q=NYSE:NSM http://www.google.com/finance?client=ob&q=NYSE:NSM (not exactly the same months, because their Q1 goes from Dec-Feb, but still a useful point of comparison) One can make the case that Facebook is overvalued, perhaps even grossly overvalued, but to say that it should be valued at less than National Semiconductor is a big stretch, even if you are very conservative and use only current bottom-line financials. In my experience, those who make such statements are not basing their opinion on fundamentals of the companies, but on an opinion that companies like National Semiconductor do "real" engineering as opposed to "frivolous" social networking sites like Facebook. It's discouraging to see such attitudes, but they are not new: both early internet companies (including ones that survived the bubble and turned out to be sound companies) as well as early PC-era companies were also derided as toys or fads.
  - alain94040 16y ago
    Exactly. I have no doubt that Facebook's profits could easily triple in the next two years. For National Semi, I wouldn't bet on it :-) So yes, a somewhat larger valuation for Facebook than National sounds reasonable. So, $6B -> $15B, $20B.
philthy 16y ago
I would say that it is definitely a power or over buy. I would agree that the purchasing price could be a good bit lower. Now I'm not trying to demean Nat in anyway they are in no way a garage operation, but they have not been doing that well in the past few years. I don't know if it is a downturn in markets or competition but their stock price isn't where it was 5 years ago. http://www.google.com/finance?q=National+Semiconductor&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&sa=N&hl=en&tab=we http://www.google.com/finance?q=National+Semiconductor&o... But it sure as hell will be tomorrow look at that after hours!

reemrevnivek 16y ago

TI's press release page is here: http://www.ti.com/acquire http://www.ti.com/acquire The blog post is here: http://e2e.ti.com/blogs_/b/realworld/archive/2011/04/04/ti-to-acquire-national.aspx http://e2e.ti.com/blogs_/b/realworld/archive/2011/04/04/ti-t... (The first is basically the outline of the second...) The statement, "TI, which makes low-power chips, said..." is a huge understatement. TI dabbles in every area of electronics. Their 30,000 analog parts are supplemented by >70,000 other parts, and that number only accounts for parts which are available from Digikey.

JaymeHoffman 16y ago

This is awesome for TI! It is pretty crazy that Facebook is valued over 10 times this but if we didn't have facebook we wouldn't have likes, pokes or farmville...... If we didn't have Semiconductors we might not have Facebook. Strange world indeed! "Like" it though.

hugh3 16y ago
If we didn't have Semiconductors we might not have Facebook. And if we didn't have sand we wouldn't have semiconductors, but I still ain't buying up the Gobi Desert.
- JaymeHoffman 16y ago
  YES!

tomkinstinch 16y ago

Why aren't there greater anti-trust concerns over this?

sliverstorm 16y ago
I can't speak for everyone, but while I'm a little saddened by this, I'm too busy being optimistic about the future to get worried about anti-trust. NatSemi makes good chips, but everything else seemed a little shaky (have you seen some of their newer datasheets...?) and I hope being owned by TI will help a lot of these things.
- chrisjsmith 16y ago
  Agreed on that part. Also MultiSim is damn expensive. TI are usually cheaper on tooling and software support.
HeyLaughingBoy 16y ago
The market's diverse enough so it's not likely to be an issue. TI and National don't have a corner on any part of the market that I'm aware of. There's plenty of competition from the likes of Analog Devices, Maxim, Freescale, Siemens (not sure if Siemens is still in the IC market, tho) etc...
- reemrevnivek 16y ago
  You missed the very significant names of Linear, NXP, ST, Fairchild, and On Semi (for the analog market). Regardless, TI is bigger than any of those companies, and probably bigger than all of those companies combined.
- tomkinstinch 16y ago
  TI is definitely the largest player. Why shouldn't market consolidation by TI be questioned? Diversity may also be misperceived, as the companies may not compete directly on all product lines. If you need a chip for something, there are times when it is only produced by one company. Here are a few quickly-Googled numbers: TI Revenue: $13.966 billion Net Income: $3.228 billion ST Microelectronics Revenue: $8.465 billion Net Income: $1.131 billion NXP Semiconductors Revenue: $5.44 billion Net Income: $1.823 billion Infineon (Siemens) Revenue:$4.688 billion Net Income: $937 million Freescale Revenue: $4.46 billion Net Income: $1.15 billion Analog Devices Revenue: $2.8 billion Net Income: $712 million ON Semiconductor Revenue: $2.131 billion Net income: $395.8 million Maxim Revenue: $1.998 billion Net Income: $129 million Fairchild Semiconductor Revenue: $1.6 billion Net Income: $193 million National Semiconductor Revenue: $1.42 billion Net Income: $209.2 million Linear Technology Corp. Revenue: $1.17 billion Net income: $361 million The US used to have a consistent anti-trust tradition. With Ma Bell reuniting and mergers like this, it seems to be waning.

Montagist 16y ago

I think they also may be going for some of the maker market as well.

ck2 16y ago

Is this good or bad for the future of ARM cpu/chipsets?

reemrevnivek 16y ago
It's irrelevant: National doesn't make many microcontrollers, much less CPUs. They've got a few small, overpriced 8- and 16-bitters (think garage door opener, not smartphone) running proprietary cores, but those are not very popular. (And they've reassured us that they won't discontinue this stuff anytime soon, though I think that it's high time to start looking elsewhere if you depend on National's microcontrollers...) This does have an impact, though, on the support components which are necessary to build a motherboard - voltage regulators, sensors, diodes, transistors, glue logic, level translators, etc. National and TI used to be competitors in that arena, now they're on the same team.

chrisjsmith 16y ago

I see a lot of people saying "ooh facebook is valued 10x" that but you have to look at history. Facebook does NOTHING for ANYONE really other than a) support a number of people piggy-backing on it to make some cash b) keeps VC's occupied and salivating over their new Ferrari's and whores and c) violates everyone's right to privacy to the highest bidder. NI/TI produce REAL, IMPORTANT devices and platforms which a large quantity of the world runs on that keeps you dry, transported, fed, sheltered and entertained.