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IoT Mergers & Acquisitions Semiconductors

Intel, Samsung, Avago looking to beat Qualcomm in race to NXP

Qualcomm’s rumored purchase of Dutch chipmaker NXP Semiconductors for $30 billion 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’s parent company Avago Technologies.

The allure of NXP lies in how it would provide differentiation from the core mobile SoCs, GPUs, and radio businesses of the chip giants into industries such as the IoT and automotive sectors, thanks to NXP’s $12 billion purchase of dominant automotive player Freescale last year – which had a 14% share of the automotive semiconductor market 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, and it looks like the deal will take two or three months to come to fruition, it at all.

The semiconductor market has been in a period of significant consolidation, namely Softbank’s $32 billion acquisition of ARM, and last year’s entire semiconductor dealings came to $75 billion.

NXP’s stock price has shot up from $88.81 to $102.76 within the past five days, and its market cap now sits at $37.7 billion. Qualcomm’s, meanwhile, spiked initially as the Wall Street Journal broke the first rumor last week, but it has slipped slightly from $69.81 at the tail end of last week to $67.11 today.

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