Wireless chip maker Skyworks to buy networking chip provider PMC-Sierra in $2B all cash deal
Tiernan Ray / Tech Trader Daily :
Context & Ripple Effects
This October 2015 report opens one of the more instructive chip-deal sagas of the decade: Skyworks, best known as a mobile RF supplier, moves to diversify by paying $2B in cash for PMC-Sierra, a networking and storage semiconductor vendor. What makes the story worth revisiting is how it ended — Microsemi jumped in twelve days later with a $2.4B counteroffer, and by late November had won the asset outright with a $2.5B cash-and-stock bid.
First-order effects
- PMC-Sierra shareholders were positioned for a clean all-cash exit at a premium, while Skyworks would have gained a networking and storage chip line beyond its handset-centric RF business.
Second-order effects
- Microsemi's entry escalated the price for the same asset by roughly half a billion dollars in under two months, showing how a single credible bidder forces rivals to pay up rather than walk away.
Third-order effects
- Skyworks stayed on the diversification path anyway — six years later it bought Silicon Labs' automotive and infrastructure unit for $2.75B, including EV power and isolation chips — while the broader pattern held in deals like Semtech's $1.2B acquisition of Sierra Wireless: mid-cap analog and embedded semiconductor vendors consolidating through serial M&A.
The trend: Mid-tier semiconductor makers are using acquisitions of networking, storage, and embedded chip assets to escape single-market dependence, with competitive bidding routinely repricing targets upward.