Analog Devices is nearing a $1.5 billion cash agreement for Empower Semiconductor's AI power chips.
The Milpitas-based vertical power delivery company delivers over 3,000 amps of current directly to the GPU. An announcement regarding the deal could come as early as Tuesday.
According to a report from Bloomberg on Tuesday, citing sources familiar with the situation, Analog Devices is in advanced negotiations to purchase Empower Semiconductor, a private California-based power management chip firm, for $1.5 billion in cash. A formal announcement could happen as soon as Tuesday, in US time.
Both companies have not publicly confirmed the discussions. Empower's products are essential for the construction of AI data centers. Founded in 2014, the Milpitas-based company designs integrated voltage regulators that are positioned directly beneath the GPU or other AI accelerators, delivering over 3,000 amps of current through the PCB instead of across it.
The company’s Crescendo platform, introduced in October 2024, illustrates 'vertical power delivery' (VPD), a design change that leading GPU manufacturers are incorporating into their next-generation reference designs as power densities have surpassed traditional lateral power systems.
The pivotal technical assertion leading Empower into this category is simple; placing the voltage regulator directly under the accelerator can result in around a 20% reduction in total system power, according to Empower’s estimates, by eliminating resistive losses when handling 3,000-amp currents laterally.
For hyperscalers managing tens of gigawatts of AI computing over a multi-year capital expenditure cycle, the potential operational savings are significant enough to consider the underlying voltage-regulator intellectual property a strategic asset instead of just a commoditized part.
Empower successfully closed a Series D funding round of over $140 million in late 2024, led by Fidelity Management & Research, with participation from Maverick Silicon, CapitalG, Atreides Management, Socratic Partners, Walden Catalyst Ventures, Knollwood, and a subsidiary of the Abu Dhabi Investment Authority.
The $1.5 billion acquisition price mentioned for the potential Analog Devices deal signifies a considerable increase from that financing round and reflects the revaluation experienced by AI-power suppliers aligned with hyperscalers throughout the spring.
Analog Devices, a publicly traded company on the New York Stock Exchange with a market capitalization of around $140 billion, has focused on acquisitions to strengthen its position within AI infrastructure over the past two years.
If acquired, Empower would fit into ADI's power management sector alongside its current voltage regulation offerings, with the strategic intent being the acquisition of VPD intellectual property and design expertise instead of just a standardized manufacturing capability.
It will be revealed whether ADI intends to integrate Empower's designs into its existing plans or operate the acquired entity as an independent unit serving hyperscaler clients once the deal is officially announced.
The larger macro context has been somewhat overlooked in financial media commentary. Major tech companies' capital expenditure commitments for 2026 have reached over $650 billion across Microsoft, Alphabet, Amazon, Meta, and Apple, with a majority of the investment directed toward AI data center infrastructure.
The obstacle has been progressively moving upstream, from GPU supply issues (the Nvidia volume problem of 2024) to data center site availability (the 2025 problem) to power delivery architecture (the 2026 problem).
The recently announced $67 billion merger between NextEra and Dominion represents a macro-level version of this dynamic, while the ADI-Empower deal serves as the chip-level equivalent.
The broader power semiconductor industry will closely observe the competitive implications of this situation. If $1.5 billion is the going rate for a private VPD specialist with $140 million in disclosed prior funding and a Crescendo-level product, the resulting valuation multiples for publicly traded power semiconductor peers (such as Vicor, Texas Instruments’ power management division, Infineon, and STMicroelectronics) will likely be reflected in pre-market trading on Tuesday.
Bloomberg's report does not specify the negotiated multiple of Empower’s current revenue or provide a closing timeline, aside from indicating that an announcement could be made "as soon as Tuesday."
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Analog Devices is nearing a $1.5 billion cash agreement for Empower Semiconductor's AI power chips.
Analog Devices is currently in advanced negotiations to purchase AI power chip firm Empower Semiconductor for $1.5 billion in cash. An announcement regarding the deal might be made as soon as Tuesday.