STM's $3B Mobile Chip Biz

STMicro buys into NXP to create huge – but largely anonymous – $3B chip venture

Dan Jones, Mobile Editor

April 11, 2008

1 Min Read
STM's $3B Mobile Chip Biz

6:05 PM -- It might be the largest chip company you've never heard of: STMicroelectronics NV (NYSE: STM) has paid $1.55 billion for an 80 percent stake in NXP Semiconductors N.V. (Nasdaq: NXPI) to create a mobile powerhouse semiconductor company that could rival the likes of Broadcom Corp. (Nasdaq: BRCM), Qualcomm Inc. (Nasdaq: QCOM), and Texas Instruments Inc. (NYSE: TXN).

The new company will cover a broad swathe of mobile technologies within its portfolio. Between the two operations, the firms can boast 2G and 3G cellular products, WiFi, ultrawideband (UWB), location technology, and more. (See NXP to Buy Location Smarts for $85M.) The company says that it will be positioned to take on the expanding UMTS market as well as the emerging 3G Chinese standard and other wireless technologies. The new venture will combine design, sales and marketing, and back-end manufacturing assets from both companies into a worldwide joint venture that will use its parent companies for chipmaking.</.p>NXP is originally an off-shoot from Dutch giant Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) Private equity firms purchased the majority of Philips Semiconductors (NYSE: PHG) in August 2006 for around $10 billion to create NXP, making STMicro's price for its majority stake look like a bargain. Downward price pressure is affecting all the key players in the wireless chip business.

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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