Silicon Shake-Up? Qualcomm & NXP Said to Talk $30B M&A
Qualcomm is reportedly in talks to buy Dutch semiconductor firm NXP in a deal that could be worth $30 billion or more.
The Wall Street Journal first reported that Qualcomm Inc. (Nasdaq: QCOM) is talking NXP Semiconductors N.V. (Nasdaq: NXPI), citing sources. The paper writes that any deal could take two to three months to hammer out, and Qualcomm is considering other options as well.
Nonetheless, a Qualcomm-NXP deal would be significant in terms of sales volumes alone. At the end of 2015, IHS iSuppli listed Qualcomm and NXP as the fourth and seventh largest chipmakers respectively, in terms of market share. Intel Corp. (Nasdaq: INTC) is currently number 1, with Samsung Corp. in second place, and SK Hynix grabbing the bronze at the moment.
Beyond that, buying NXP would give Qualcomm -- a market leader in smartphone processor and 4G LTE baseband chips -- much greater reach in the growing Internet of Things (IoT) market. NXP bought Freescale for $11.8 billion in 2015, giving it a portfolio of automotive and industrial IoT silicon, as well as some small cell and networking smarts. (See More Chips Fall: NXP Buys Freescale.)
NXP was originally spun-off from Dutch giant Royal Philips Electronics in 2006. Private equity firms purchased the majority of Philips Semiconductors in August 2006 for around $10 billion to create the new chip company. NXP then merged with STMicro in 2008. (See STM's $3B Mobile Chip Biz.)
The NXP deal -- if it comes off -- would dwarf Qualcomm's most recent large acquisition. Qualcomm bought British chipmaker CSR plc (London: CSR) for $2.5 billion in 2015. Nonetheless, as Light Reading has been reporting over the last two years, the entire semicon sector appears to be something in a buying frenzy. The latest massive deal being SoftBank Corp. buying ARM Ltd. for $32 bilion in July. (See Eurobites: Qualcomm to Buy CSR for $2.5B and SoftBank Muscles In on ARM in $32B Deal.)
NXP's share price is up 6.73% at $102.59 on the reports Friday. Qualcomm is trading up 2.09% at $68.86.
— Dan Jones, Mobile Editor, Light Reading