Analog Devices (ADI) is in advanced talks to acquire AI power management chip startup Empower Semiconductor for around $1.5 billion. If negotiations go smoothly, the deal could be announced as early as Wednesday, the same day ADI is set to report its quarterly earnings.
Empower, founded 12 years ago and based in Milpitas, California, has raised over $215 million from investors including Fidelity Management and Alphabet's CapitalG. The company uses a unique power delivery mechanism: instead of placing power management chips on the circuit board next to the processor — which results in significant energy loss — Empower's integrated voltage regulators (IVRs) sit directly underneath or inside the AI chip, drastically shortening the power delivery path and reducing energy waste.
Beyond cutting power loss, Empower's chips can adjust voltage extremely quickly, ensuring stability for AI accelerators during sudden computational spikes. Last year, the company partnered with Marvell Technology to develop this all-in-one power solution for custom chips.
If completed, the acquisition would bolster ADI's competitive position against Monolithic Power Systems (MPS), the primary supplier of external power management chips for Nvidia's Hopper and Blackwell accelerators. MPS shares have surged 60% this year.
ADI itself has seen a 30% jump in data center revenue in the quarter ending January, reaching $3.2 billion, and its stock is up over 50% year-to-date, thanks to surging orders from AI data center customers.