NXP, which only relatively recently had concluded the takeover of its rival Freescale, has now itself been swallowed by a much larger competitor. Qualcomm ranks number four in the world semiconductor market, NXP was even after the Freescale takeover not one of the world’s top ten chipmakers. The combined enterprise will achieve sales above $30 billion, and the takeover will activate synergies in the range of $500 milion, Qualcomm said.
The expertise of both companies is widely complementary. For instance, NXP holds strong market positions in security devices for payment systems, the Internet of Things and automotive-specific semiconductor solutions whereas Qualcomm is a leading provider of chips for the smartphone industry – an area where NXP never really was successful. There are several examples where the complementary expertise of both partners could significantly improve the combined company’s market position. For example, Qualcomm’s product range in smartphone SoCs and mobile phone modems (3G, 4G, and probably soon 5G) can be leveraged to establish NFC and eSE mobile payment solutions. Likewise, NXP’s strength in the market for secure ID, payment cards and public transportation solutions will certainly help Qualcomm to position itself in this area by combining NXPs solutions with its own computing and connectivity platforms.
However, the strongest effect of the takeover will be seen in the automotive chip market. The Freescale takeover already catapulted NXP to the pole position in this particular market segment where Qualcomm so far was never a leading player, at least it was not among the ten largest chip providers for the car industry. Nevertheless, Qualcomm built up significant expertise in seminal areas like wireless charging (for cars as well as for smartphones), computer vision, machine learning, and sensor fusion. The move enables the combined company to make a big leap forward in areas like Advanced Driver Assistance Systems, automotive connectivity and eventually