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10 October 2016

Qualcomm may face competitors in its bid to acquire NXP

Qualcomm’s reported bid to purchase Dutch chipmaker NXP Semiconductors for $30bn would push it into third place in the global semiconductor market, leapfrogging SK Hynix, but market leaders Intel and Samsung are reported to be eyeing up counter-bids, along with Broadcom.

The allure of NXP lies in its ability to accelerate the expansion of the chip giants into vertical sectors such as automotive, and the Internet of Things, partly thanks to NXP’s $12bn purchase of dominant auto semiconductor player Freescale last year.

Freescale also firmed up NXP’s assets with a significant microcontroller family, security and digital payments, and wireless infrastructure DSPs (digital signal processors) – not forgetting all the precious patents that would come with it. Around 41% of NPX’s revenues come from the automotive sector and some 24% from industrial applications.

Qualcomm remains the frontrunner despite these challengers reportedly lining up to grab NXP ahead of it, according to Bloomberg sources, but any deal is likely to take 2-3 months to come to fruition.