Dallas-based Texas Instruments Inc. is buying National Semiconductor for $6.5 billion.
It's a marriage of two of the world's premier makers of analog chips, which are widely used in electronics to transform signals such as sound into digital form that computers can understand.
TI, in scooping up National Semiconductor, is getting a storied Silicon Valley company whose history stretches back more than 50 years and is known for its power-management chips.
TI has agreed to pay $25 per share. The all-cash transaction represents a 78 percent premium over National Semiconductor's stock price before the deal was announced.
TI makes some 30,000 types of analog chips, while National, based in Santa Clara, Calif., makes 12,000.