
TI buys National Semiconductor for $6.5B - ubasu
http://www.computerworld.com/s/article/9215480/Update_TI_buys_National_Semiconductor_for_6.5B
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ihodes
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
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.

~~~
mlinsey
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...](http://nymag.com/daily/intel/2011/01/goldmans_leaked_details_on_fac.html)

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
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.

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reemrevnivek
TI's press release page is here: <http://www.ti.com/acquire> The blog post is
here:
[http://e2e.ti.com/blogs_/b/realworld/archive/2011/04/04/ti-t...](http://e2e.ti.com/blogs_/b/realworld/archive/2011/04/04/ti-
to-acquire-national.aspx) (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.

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

~~~
HeyLaughingBoy
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...

~~~
tomkinstinch
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.

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ck2
Is this good or bad for the future of ARM cpu/chipsets?

~~~
reemrevnivek
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.

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JaymeHoffman
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
_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.

------
chrisjsmith
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.

