German semiconductor manufacturer Infineon Technologies AG Monday said it’s acquiring Cypress Semiconductor Corp., a Silicon Valley-based semiconductor design and manufacturing company.

Bloomberg, quoting people familiar with the matter, had said Sunday that the deal could be announced as soon as Monday, with the acquisition price coming in at almost $10 billion including debt. On Monday, Infineon confirmed that deal for $9.4 billion.

The deal values Cypress at about $23 per share. As of the close of regular trading on the Nasdaq exchange Friday, Cypress Semiconductor stock was $17.82 per share on a market cap of $6.51 billion, so the deal gives shareholders a healthy premium.

The company’s stock jumped on May 29 after Bloomberg reported that the company was “exploring strategic options” that included a sale after “receiving takeover interest.” In 2017, the company was embroiled in a proxy fight and other issues with founder and former Chief Executive T.J. Rodgers.

Founded in 1982, the venerable company designs and manufactures high-performance, mixed-signal, programmable semiconductor products. The company’s products include programmable system-on-chip products, capacitive sensing and touchscreen solutions, universal serial bus controllers, wireless USB, CyFi low-power radio frequency, programmable clocks and buffers. In addition, Cypress offers communication products, peripheral controllers, dual-port interconnects, programmable logic devices and power PSoC along with a line of switches, cable drivers and equalizers for the professional video market.

Competitors include Microchip Technology Inc., NXP Semiconductor NV, Renesas Electronics Corp. and Micron Technology Corp.

The competitors are notable as they’re all at the forefront of a major consolidation, through acquisitions, in the semiconductor market over the last few years. Microchip acquired Microsemi Corp. for $8.3 billion in March 2018, NXP acquired Marvell Technology Group Ltd.’s wireless connectivity business unit for $1.75 billion in May, Renesas acquired Integrated Device Technology Inc. for $6.7 billion in February, and Micron acquired Intel Corp.’s stake in IM Flash Technologies for $1.5 billion in January.

In that context, Infineon buying Cypress Semiconductor doesn’t come as a surprise at all, even apart from last week’s report. The wave of consolidation in the computer chip industry has been driven by companies’ desire to cut costs and position themselves for next-generation computing applications.

“Consolidation… is being driven by Moore’s Law, which drives integration of smaller, discrete chips into larger chips,” Patrick Moorhead, president and principal analyst of Moor Insights & Strategy told SiliconANGLE in March.

One of the biggest attempted acquisitions of all time, let alone in the semiconductor space, was Qualcomm Technology Inc.’s offer to acquire NXP for $44 billion. But the deal fell through after to a delay in approval from Chinese regulators in July.

Image: Cypress Semiconductor