(Bloomberg) -- Silicon Laboratories Inc. is exploring a potential breakup and considering a sale of its analog chip business, according to people familiar with the matter. The stock rose as much as 10%.

The unit could fetch $2 billion to $3 billion and perhaps more, according to the people, who asked to not be identified because the matter isn’t public.

Silicon Labs is working with a financial adviser on selling the unit, which could attract interest from other semiconductor companies, the people said.

No final decision has been made and Silicon Labs could opt to keep the unit, they said. Analog chips convert things in the real world, such as pressing a button or sound, into digital signals.

A representative for Austin, Texas-based Silicon Labs declined to comment.

Silicon Labs rose 9% to $160.54 at 1:40 p.m. Friday in New York, giving it a market value of about $7.1 billion.

While the stock has doubled since 2016, the gains have lagged the broader industry.

Silicon Labs’s chips are used by makers of smart-home gear, industrial automation, vehicles and data center equipment, all markets that are expanding rapidly.

By divesting its analog business, Silicon Labs would focus on its business related to the so-called internet of things, or chips used to bring connectivity to devices. Sales of such chips account for close to 60% of its revenue.

While Silicon Labs is growing, it’s a small chipmaker that hasn’t yet passed $1 billion in annual sales.

Standalone companies of Silicon Labs’s size have been lured into mergers in recent years, as the growing costs of design and production have led to consolidation in the space.

(Updates share movement in first and fifth paragraphs)

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