Analog Devices Acquires Empower Semiconductor in $1.5B Deal

Analog Devices has agreed to acquire Empower Semiconductor in a $1.5 billion all-cash transaction, placing a strategic wager that the relentless energy appetite of AI data centres will keep the chip industry racing for more efficient power delivery solutions.

Announced Monday, the deal gives the Wilmington, Massachusetts-based chipmaker ownership of Empower’s integrated voltage regulators, which sit directly beneath AI accelerators and push current vertically through the circuit board instead of routing it sideways. Empower claims this design can reduce a system’s total power consumption by roughly 20% , a difference that becomes enormous when a single hyperscale facility can draw hundreds of megawatts.

“AI infrastructure is fundamentally reshaping how power must be delivered, with energy now the most persistent constraint to scaling next-generation systems,” said Vincent Roche, chief executive and chair of Analog Devices.

Roche said Empower’s technology will broaden ADI’s portfolio and help customers “achieve the compute densities next-generation AI demands.” Tim Phillips, who co-founded Empower in 2014 and serves as its chief executive, will remain with ADI to lead integrated voltage regulator development.

Empower, headquartered in Milpitas, California, has been growing rapidly. In September 2025 it closed a Series D round of more than $140 million led by Fidelity Management & Research, with backing from Maverick Silicon, CapitalG, Atreides Management, and others. That round lifted total funding to roughly $236 million across multiple rounds. The company also opened a new corporate headquarters in Milpitas and a dedicated R&D centre in Munich late last year, signalling ambitions beyond its Silicon Valley base.

The acquisition comes as billions of dollars pour into AI infrastructure from chipmakers and hyperscalers. Nvidia alone has committed more than $40 billion in AI equity bets so far in 2026, while Meta recently signed a $27 billion data-centre deal with Nebius. Power efficiency has become a central competitive battleground, with startups racing to curb data-centre energy use even as workloads explode.

For Analog Devices, the timing is significant. The company reports second-quarter earnings on Tuesday, with analysts expecting record revenue of roughly $3.5 billion. Its shares have gained more than 52% this year, pushing ADI’s market capitalisation above $200 billion. PJT Partners advised Analog Devices on the transaction, while Barclays acted for Empower.

Analog Devices designs and manufactures chips for industrial, automotive, communications, and consumer-electronics markets. It is the third-largest US-listed chipmaker not primarily focused on processors, and the Empower deal marks its biggest acquisition in years.

The transaction is expected to close in the second half of 2026, subject to regulatory clearance under the Hart-Scott-Rodino Act. If approved, ADI will integrate Empower’s FinFast technology and Crescendo power platform into its existing grid-to-core power portfolio.

Whether the deal becomes a bargain or a premium depends on how quickly AI power budgets keep climbing, but early reports had already flagged that both sides were close to an agreement. With energy costs now rivaling silicon itself as the bottleneck in AI scaling, Analog Devices is betting that the chips closest to the processor will be the ones that matter most.