Diodes Incorporated (NASDAQ:DIOD) after rallying at the beginning of the month declined towards the end of the previous week. The stock however gained 2.98% in the previous trading session to close the day at $36.26. On the other hand, Texas Instruments (NYSE:TXN) continued to enjoy a health gain in the market following a leap at the end of January and in the last trading session the stock gained 1.60% to close the day at $106.44.
This is at the back of an announcement that the Diodes had signed a deal for the acquisition of the Texas Instruments fabrication facility covering over 300,000 sq. ft.
Acquisition of the Texas instrument facility
Three years ago Texas Instruments had indicated that they were closing the facility and folding their production into the rest of the plants in Maine, Germany, and Japan. Texas Instruments indicated that operations in the facility were to close at the end of this year and it’s over 300 employees will be part of Diodes after closing the deal.
Although the company did not reveal the terms of the deal it is nonetheless expected to wrap up by the end of the first quarter. However, as part of the multi-year deal, diodes will continue to manufacture Texas Instruments’ analog products for the next few years.
In a statement, SVP Kyle Flessner indicated that they were pleased that their operations will continue under the leadership of Diodes and Texas Instruments was looking forward towards working with the Greenock team as the company finalizes the transfer of its production to the rest of the sites.
Diodes growing in the semiconductor market
Although Diodes is little known it is growing fasts as a major player in the semiconductor market and already it has grown its reach to the UK, Taiwan, China, and Germany.
Diodes CEO Keh-Shew Lu stated that the agreement for the Texas Instruments facility aligns well with the company’s strategic plan for revenue and profit growth in the next few years. He added that the transaction meets Diodes’ strategic criteria for acquisitions and they expect to be accretive immediately.
Diodes’ market valuation of $1.7 billion and most of its revenue is from automotive, industrial, communications as well as computing.