- A slew of chip stocks are rallying following Analog Devices' (NASDAQ:ADI +5.9%) $2B deal to acquire RFIC vendor Hittite Microwave.
- The purchase is part of an M&A wave that has hit the semiconductor industry over the last 12 months, as chipmakers try to gain scale, cut opex, and grow their cross-selling opportunities by consolidating. Other deals: RF Micro/TriQuint, Avago/LSI, Microchip/ISSC.
- ADI, which shares many telecom equipment, defense/aerospace, and automotive clients with Hittite, predicts Hittite's RF, microwave, and millimeter wave ICs will complement its RF and signal-conversion (ADC/DAC) products.
- Several RF and analog/mixed signal chipmakers are higher, but they're not the only gainers: RFMD +1.8%. TQNT +1.8%. PSMI +2.5%. LLTC +1.6%. MSCC +2.1%. IDTI +3.8%. ATML +3.4%. IRF +1.4%. OTC:SIGM +3.9%. AMCC +3.8%.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG