(Bloomberg) -- Microchip Technology Inc., a maker of chips used in cars and computers, said it agreed to buy Microsemi Corp. for about $8.35 billion, continuing a wave of consolidation that’s sweeping through the semiconductor industry.

The Arizona-based chipmaker will pay $68.78 per share in cash, it said Thursday in a statement. That’s a premium of 7 percent on Microsemi’s closing price of $64.30. The deal is subject to approval by Microsemi’s shareholders and is expected to close in the second quarter, Microchip said. Shares of both companies were halted during the announcement.

The deal is the latest transaction in a flood of combinations that are reshaping the chip industry. Companies are getting together to add scale amid rising costs and shrinking customer lists. The biggest-ever proposed deal in the technology industry -- the ongoing attempt by Broadcom Ltd. to acquire Qualcomm Inc. -- is the prime example of that trend.

Microchip makes a variety of chips used in industries ranging from communications to home appliances to military gear. Microsemi, based in Aliso Viejo, California, is more specialized and has traditional strength in chips that are toughened for use in harsh environments such as those encountered by electronics used in aircraft and defense-related devices.

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