Respected semiconductor maker Microchip Technology (Nasdaq: MCHP) said it will acquire smaller Standard Microsystems (Nasdaq: SMSC) for $939 million.

The deal is intended to bolster Microchip's role in the market for communications chips that are used in a wide range of professional and networking products. The Chandler, Ariz., company said it expects to complete the acquisition this year.

It is the second major semiconductor merger announced this week, and the move may indicate that smaller chipmakers need to consolidate to compete with the likes of the giants headed by Intel (Nasdaq: INTC), the No. 1 chipmaker,and Texas Instruments (Nasdaq: TXN), the No. 2 U.S. maker.

On Tuesday, Integrated Device Technology Inc. (Nasdaq: IDTI) in San Jose, Calif., said it would acquire PLX Technology (Nasdaq: PLXT) for $330 million.

Shares of Microchip fell 31 cents by the close to $34.92, shares of Standard Micro rose 40 percent to $36.43, up $10.19. The companies conducted an investor call on Wednesday.

Standard Micro, of Hauppauge, N.Y., is one of the best-regarded developers of communications and network chips. At one point, Intel held an important stake, less than 25 percent, in the company, which it later sold.

The company developed many pioneer products in smart signal control technology, now widely used in cars and thermal management and sensor equipment.

We are pleased to become part of Microchip, Standard CEO Christine King said. She is one of the very few female CEOs in the technology industry.

Microchip CEO Steve Sanghi said Standard Micro's expertise is an ideal complement to his company's embedded control business.