Texas Instruments, After a Big Purchase, Is a Better Value Than Its Rivals

(Clarifies to say the acquisition of National Semiconductor has closed.)

NEW YORK (TheStreet) -- Texas Instruments' (TXN) biggest challenge is convincing Wall Street it deserves the same respect as rival chipmakers ARM Holdings (ARMH) and, to a lesser extent, Qualcomm (QCOM).

Not only has the company recently demonstrated it can compete in segments dominated by Intel (INTC), but interestingly, Texas Instruments is now showing it will open its wallet to prove its level of commitment toward growth. But is Wall Street impressed?

As consistent as Texas Instruments has been over the years, it has always flown under the radar of Wall Street and hidden in the shadows of Intel. So as Qualcomm and ARM receive the lion's share of the press, it came as no surprise that Texas Instruments decided to do something about it -- ahead of the mobile data surge about to unfold. Not only did the company acquire National Semiconductor, but it went on a shopping spree, buying various companies' equipment and fabrications. Texas Instruments paid $6.5 billion for National Semi in an all-cash transaction. This is a great move, and one that already presents a considerable amount of synergistic advantages.

In the deal, Texas Instruments got assets that are already deeply rooted in a host of growing market segments. These include not only analog devices and subsystems, but products that extend out to power management circuits, audio and operational amplifiers, data conversion solutions as well as communication interfaces. One noteworthy advantage is that National Semiconductor immediately became part of Texas Instruments' analog segment. This means almost half of its revenue is now counted as part of National Semi's sales of analog semiconductors. Texas Instruments is clearly trying to distinguish itself from what its current rivals are offering, and it's an excellent strategic move.

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