Texas Instruments: Acquisition of Silicon Labs and the Attack on the IoT Chip Throne

Texas Instruments is entering a new chapter of its story in the semiconductor industry. The company has announced that it is acquiring Silicon Labs, one of the leaders in wireless chips and IoT solutions, for approximately $7.5 billion in cash. This is one of the largest transactions in the history of Texas Instruments, which can fundamentally change the balance of power in the segment of smart devices, the industrial Internet of Things, and edge AI.[1]

About the company

Texas Instruments is one of the oldest and most important technology companies in the semiconductor industry. Its roots go back to 1930, when it was founded under the name Geophysical Service. Over time, it transformed into a manufacturer of electronics and integrated circuits, and since the 1950s, it has been among the pioneers in semiconductors. Today, it focuses primarily on the development and production of analog integrated circuits and embedded processors. Analog chips process real, continuous signals from the physical world, such as temperature, pressure, or movement, while embedded processors are small computing units built directly into devices that control a specific function.[2]

Why Texas Instruments is buying Silicon Labs

The acquisition of Silicon Labs for approximately $7.5 billion is a strategic bet by Texas Instruments (TI) on the future of IoT and connected devices. TI has long dominated in analog and embedded chips, but in specialized wireless platforms and software ecosystems, it lagged behind players that focused on low‑power connectivity and the developer community. Silicon Labs brings exactly what TI was missing. A strong portfolio of wireless chips for Bluetooth, Zigbee, Thread, Z‑Wave, and other protocols, together with tools and SDKs to which thousands of projects and products are tied. The high premium valuation of the transaction thus reflects TI management’s conviction that, for long‑term growth, it is not enough to be just an analog leader, but it is necessary to own both the brain and the connection for every sensor and device in industry, automotive, and smart homes.[3][4]

Wireless chips and the developer ecosystem

Silicon Labs is not only a chip manufacturer, but also the owner of a valuable software and developer ecosystem. Its chips power a wide range of devices from smart homes and intelligent lighting through industrial sensors to medical and security solutions. The key to their success is the software, libraries, and tools that significantly simplify the work of developers. Platforms such as Simplicity Studio make Silicon Labs an attractive partner for device manufacturers because they shorten the time from idea to finished product. By integrating these technologies and tools into TI’s portfolio, the company immediately moves closer to developers and OEM partners, while it can combine its own analog and power chips with top‑class wireless connectivity and thus offer more comprehensive solutions for IoT and edge AI.3[5]

300 mm fabs and reshoring production to the USA

One of the main reasons why the acquisition of Silicon Labs is so strategic for TI is the possibility of shifting a significant part of production to its own 300‑millimetre manufacturing lines in the USA. Texas Instruments has long been building a model in which it is not only a chip designer but also the owner of manufacturing capacities, which allows it to have greater control over costs, margins, and supply stability. Silicon Labs operates predominantly as a fabless company, relying on external foundries. TI plans, in the medium term, to migrate many Silicon Labs products into its own fabs, which can reduce production costs, better utilize investments into 300 mm fabs, and at the same time support the policy of onshoring the production of critical components within the USA. In the context of global tensions and efforts to reduce dependence on Asian manufacturers, this is an important step that can strengthen TI’s position as a reliable supplier for industry, carmakers, and infrastructure projects.[6][7]

Impact on competitors in IoT and edge AI

The combination of Texas Instruments and Silicon Labs creates pressure on several competitors in the IoT and edge AI segment. Companies such as NXP, STMicroelectronics, Infineon, and Nordic Semiconductor have so far benefited from the fact that the market for wireless and sensor solutions was fragmented, and TI was more focused on classic analog products. After the acquisition, a player emerges who can offer a wide range of solutions from the analog front-end through the computing core to wireless connectivity and software tools in a single package. At the same time, the bargaining position of device manufacturers changes. Thanks to its scale, portfolio, and in-house manufacturing, TI can offer attractive combinations of price, quality, and availability, which can make competition more difficult for companies that are more dependent on external foundries or have a narrower product portfolio.6

What it means for investors and the future of IoT

For investors, the acquisition of Silicon Labs represents a double signal. On the one hand, TI is paying a high premium and taking on integration risk. It must manage the migration of products into its own fabs, maintain the satisfaction of developers and OEM partners, and deliver the promised synergies in hundreds of millions of dollars per year. On the other hand, however, the transaction confirms that the management of Texas Instruments sees IoT, wireless connectivity, and edge AI as key growth engines for the next decade and is willing to deploy capital where it expects long‑term returns. From a long‑term perspective, this can mean a shift for TI from a defensive analog bet to a more attractive growth profile, if the integration is successful. At the same time, it is further evidence that the IoT value chain is shifting from isolated chips to integrated platforms that combine hardware, software, manufacturing, and ecosystem, which may also affect the valuations of other players in the sector.

Conclusion

The acquisition of Silicon Labs moves Texas Instruments out of the comfort zone of a stable analog leader into the front line of the battle for the future of the Internet of Things and edge AI. For a high premium, it is buying not only technologies, but also access to wireless standards, the developer ecosystem, and the possibility to better utilize its own fabs in the USA. For competitors, this is a clear signal that the IoT chip and connectivity segment is consolidating at an accelerated pace and that the space for standalone specialists will be shrinking.

[1]https://www.reuters.com/sustainability/sustainable-finance-reporting/texas-instruments-buy-chip-designer-silicon-laboratories-75-billion-deal-2026-02-04/

[2]https://en.wikipedia.org/wiki/Texas_Instruments

[3]https://www.iot-now.com/2026/02/05/155254-texas-instruments-to-acquire-silicon-labs/

[4]https://fintool.com/news/texas-instruments-silicon-labs-acquisition

[5] https://www.cepro.com/news/silicon-labs-producer-of-z-wave-chips-to-be-acquired-by-texas-instruments/625055/

[6]https://www.ainvest.com/news/texas-instruments-7-5b-silicon-labs-deal-tactical-play-iot-edge-ai-2602/

[7]https://www.ti.com/about-ti/newsroom/news-releases/2026/2026-02-04-texas-instruments-to-acquire-silicon-labs.html