Analog Devices Inc (NASDAQ:ADI) said it has agreed to acquire closely held Empower Semiconductor for $1.5 billion in cash to expand its position in artificial intelligence data center power management, as the chipmaker posted record fiscal second-quarter revenue.
The deal, expected to close in the second half of 2026, brings Analog Devices an integrated voltage regulator technology designed for next-generation 800-volt AI data center architectures, which require more compact and efficient power delivery systems than traditional designs. Empower's technology moves power regulation directly next to processors, eliminating bulky circuit board-mounted capacitor banks.
Alongside the news, Analog Devices reported fiscal second-quarter revenue of $3.62 billion, up 37% from a year earlier, driven by demand across its industrial, automotive, communications, and consumer markets. Net income roughly doubled from a year ago, supported by a $1.2 billion rise in operating income.
Diluted earnings per share came in at $2.40, up 111% year over year, while adjusted diluted EPS was $3.09. GAAP gross margin reached 67.3% and operating margin was 38.1%, with adjusted operating margin at 49%.
The company returned $1.3 billion to shareholders during the quarter and reported trailing 12-month free cash flow of $4.57 billion, equal to 36% of revenue. Cash and equivalents stood at $3.4 billion, with an undrawn $3 billion revolving credit facility available.
For the fiscal third quarter, Analog Devices guided for revenue of $3.9 billion and earnings per share of $2.60 on a GAAP basis and $3.30 adjusted.
Baird analysts noted the Empower acquisition is strategically aligned with Analog Devices' existing data center power portfolio and positions the company to benefit from a projected fivefold to sixfold increase in power supply unit content as 800-volt native AI data centers become more prevalent.
Shares of Analog Devices fell 6.7%.