Texas talk boosts Wolfson shares

Published on Wednesday 23 April 2008 21:40

WOLFSON Microelectronics, the semi-conductor designer, was the subject of takeover speculation yesterday after an American rival said it may take advantage of low values in the sector.

Shares in Edinburgh-based Wolfson, which makes components for MP3 players and other consumer gadgets, rose 8.5 per cent to 134p on reports that Texas Instruments (TI), the Fortune 500 semiconductor group, was hoping to take advantage of a "weaker environment" for chip makers to bolster its business.

TI chief financial officer Kevin March was quoted in an online technology newsletter saying: "We believe a weaker environment may present opportunities for us to bolster our strategic position in the analogue market that simply are not available to us when demand is strong. These can range from improved availability of analogue engineering resources ... to additional opportunities for targeted acquisitions."

Wolfson, which specialises in chips that convert digital signals into analogue sound, was immediately named by analysts and traders as a potential attractive target for Texas.

Spun out of the University of Edinburgh, Wolfson holds a premium position in the analogue market, supplying chips for devices such as the Apple iPhone. Shares have fallen sharply due to a sector slowdown, and the loss of key contracts, tumbling 62 per cent from last year's peak.

A spokeswoman for Wolfson declined to comment.

Chief executive Dave Shrigley was today set to present Wolfson's first-quarter results, which are expected to show revenues of 44-48 million.