Qualcomm to Acquire NXP for “Connected World” Markets
In the largest deal in the history of the chip industry, wireless industry giant Qualcomm will acquire semiconductor maker NXP Semiconductors in a deal valued at $47B, according to Qualcomm.
In NXP, Qualcomm is acquiring technology and expertise in mixed-signal semiconductor electronics with major implications for emerging IoT markets. NXP has more than 25,000 customers and claims solutions designed into 14 of the top 15 infotainment customers in 2016.
It’s been a big year for M&A activity in the technology industry: Softbank bought ARM for $32B and Dell purchased EMC for $67B, along with last year’s acquisition by Avago of Broadcom ($15B).
“By joining Qualcomm’s leading SoC capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT,” said Steve Mollenkopf, CEO of Qualcom, "we will be even better positioned to empower customers and consumers to realize all the benefits of the intelligently connected world.”
The combined company is expected to have annual revenues of more than $30 billion selling into markets of projected at $138 billion by 2020, according to Qualcomm. In announcing the acquisition, Qualcomm said the two companies have complementary technologies in mobile SoCs, 3G/4G modems and security; automotive semiconductors, including ADAS, infotainment, safety systems, body and networking, powertrain and chassis, secure access, telematics and connectivity; microcontrollers for the IoT, secure identification, mobile transactions, payment cards and transit; network processors for wired and wireless communications and RF sub-segments, Wave-2 11ac/11ad, RF power and BTS systems.
Qualcomm said it expects to generate $500 million of annualized run-rate cost synergies within two years after the transaction closes.
“The combination of Qualcomm and NXP will bring together all technologies required to realize our vision of secure connections for the smarter world, combining advanced computing and ubiquitous connectivity with security and high performance mixed-signal solutions including microcontrollers,” said Rick Clemmer, NXP CEO.
"The pace of innovation in automobile and IoT will increase dramatically and I think we look at it as a tremendous opportunity," said Mollenkopf during a conference call announcing the deal.
Qualcomm reported revenues of $23.5B in 2015. NXP has 44,000 employees in more than 35 countries and posted revenue of $6.1 billion in 2015.