Microchip Technology Inc. (Nasdaq: MCHP) is set to acquire Supertex Inc. (Nasdaq: SUPX) for about $394 million, or $33 per share, in cash.

The Chandler, Ariz.-based manufacturer, known for developing specialized semiconductor products, says the deal will strengthen many of the company’s initiatives, including high voltage analog and mixed signal technologies. Supertex—whose technology is known to be used in various medical, industrial and lighting products—will be folded into Microchip’s analog business.

This is the first deal for Microchip since it purchased Novocell Semiconductor Inc., a Hermitage, Pa.-based developer of memory intellectual property, in June 2013.

While the transaction has been approved by the boards of directors of each company, it is still subject to approval by Supertex’s stockholders and must undergo regulatory approvals.

The acquisition comes just days after the $1.15 billion merger of two major semiconductor companies: Entegris Inc. (Nasdaq: ENTG) and ATMI Inc.  (Nasdaq: ATMI).

Observers note that there may be an uptick in M&A among semiconductor suppliers due to the mounting pressure from major manufacturers. Larger companies like Samsung Electronics Co., Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) and Intel Corp. (Nasdaq: INTC) dominate when it comes to spending on equipment and, as a result, reduce the number of major contracts and big customers available.

Technology