Texas Instruments to Buy Silicon Systems

Texas Instruments Inc. said Tuesday that it has agreed to acquire Silicon Systems Inc. of Tustin, a maker of semiconductors used in computer disk drives, from TDK USA Corp. for $575 million in cash and a long-term note.

Silicon Systems will remain based in Tustin and become a wholly owned subsidiary of Texas Instruments, the Dallas-based maker of a range of high-tech products, including printers and laptop computers.

Texas Instruments also makes semiconductors used in disk drives, but its devices serve a different function than those manufactured by Silicon Systems. The latter company’s semiconductors control the operations of the drive, while Texas Instruments’ devices process data before passing it along to the main processing unit of the computer, Silicon Systems spokesman Cliff Silver said.

“We’ve got complementary capabilities,” Silver said. “We can now serve disk manufacturers such as Western Digital in Orange County with the whole package.”

Rick Goerner, chief operating officer of Silicon Systems, will remain with the company as president of the subsidiary. “Today’s announcement is good news for our customers as we will now have access to Texas Instruments’ high-volume global manufacturing network and advanced-process technologies,” Goerner said.

Silicon Systems was bought by Tokyo-based TDK in 1989 for $220 million, Silver said. Silicon Systems has about 2,000 employees, about 600 of them in Orange County. Texas Instruments employs more than 31,000 people, with operations spread among more than 30 countries.

There are no plans for layoffs. “The whole notion of this is to grow the business,” Silver said. The transaction is expected to close within two months, he said.