January 03, 2007 (IDG News Service) -- In the second big deal by a U.S. company to buy a Taiwanese chip maker in recent months, Fairchild Semiconductor Corp. on Tuesday launched a $200 million bid to buy System General Corp.

The two companies specialize in chips that manage power in digital devices, but Fairchild has been around far longer. Based in South Portland, Maine, Fairchild was born from the ideas and investments of several chip titans, including Gordon Moore and Robert Noyce, both of Intel Corp. fame. Fairchild was incorporated in 1957. Taipei, Taiwan-based System General opened in 1983, focusing on power management chips from the start.

In a statement, Fairchild cited System General's strong power products and its sales in China and Taiwan as key reasons for its interest in the company.

All 250 employees of System General will join Fairchild if the deal goes through. Fairchild said that it does not expect the purchase to add much to its sales in 2007.

The proposed deal follows on the heels of a high-profile offer that a consortium of investors made in November for the world's largest chip assembly company, Taiwan's Advanced Semiconductor Engineering Inc. (ASE). In that deal, The Carlyle Group, a U.S. private equity firm, is leading a possible $5.5 billion purchase of ASE. The parties are still in talks, but a formal offer has not yet been made.

The worldwide chip industry has been gripped by buyout fever. Last year, another Carlyle-led group agreed to pay $17.6 billion for Freescale Semiconductor Inc., while Philips Electronics NV sold a majority stake in its chip unit to another group for around $10.6 billion.

In addition, microprocessor giant Advanced Micro Devices Inc. bought graphics chip maker ATI Technologies Inc., and graphics chip processor maker Nvidia Corp. said it plans to purchase digital music chip maker PortalPlayer Inc.