NXP's $11.8 billion acquisition of Freescale is the latest of many moves taming the wild semiconductor sector.

Dan O'Shea, Analyst, Heavyreading.com

March 2, 2015

2 Min Read
More Chips Fall: NXP Buys Freescale

NXP is acquiring onetime Motorola spinoff Freescale for $11.8 billion in the latest deal demonstrating the rapid pace of consolidation in the semiconductor market.

Netherlands-based NXP Semiconductors N.V. (Nasdaq: NXPI) is spinning the Freescale deal as a $40 billion merger, though Freescale Semiconductor Inc. shareholders are receiving $6.25 in cash and a fraction (0.3521) of an NXP share for each Freescale share they own. The deal comes after Freescale made a couple of consolidation moves of its own within the last year. The Austin, Texas, company acquired Zenverge in December and bought the former Mindspeed networking unit from MACOM last spring. (See Freescale Buys Zenverge and Freescale to Buy Mindspeed Unit from MACOM.)

Also, a frenetic pace for semiconductor sector consolidation has been established by companies such as Intel Corp. (Nasdaq: INTC), Avago Technologies Pte. , Qualcomm Inc. (Nasdaq: QCOM) and M/A-COM Technology Solutions Inc. , all of which have made multiple acquisitions in recent years as they have sought to diversify their chip technology arsenals while pursuing emerging markets such as connected cars, IoT and 100G optical networking, among others. (See Intel to Acquire Lantiq, Avago Eyes Enterprise Storage With Emulex Buy, Qualcomm Advances WiGig With Wilocity Buy and MACOM to Buy Mindspeed for $272M.)

Want to know more about communications semiconductors? Check out our dedicated semiconductors content channel right here on Light Reading.

The NXP-Freescale deal has the automotive sector centered in its sights, but there are also implications for IoT in general, as well as security products, small cells and other networking gear. Freescale was spun off from Motorola nearly a decade ago and acquired by The Blackstone Group and other private equity firms for $17.6 billion. The company pursued a partial IPO in 2011, though more than 60% of it remains privately held.

— Dan O'Shea, Managing Editor, Light Reading

About the Author(s)

Dan O'Shea

Analyst, Heavyreading.com

You want Dans? We got 'em! This one, "Fancy" Dan O'Shea, has been covering the telecom industry for 20 years, writing about virtually every technology segment and winning several ASBPE awards in the process. He previously served as editor-in-chief of Telephony magazine, and was the founding editor of FierceTelecom. Grrrr! Most recently, this sleep-deprived father of two young children has been a Chicago-based freelance writer, and continues to pontificate on non-telecom topics such as fantasy sports, craft beer, baseball and other subjects that pay very little but go down well at parties. In his spare time he claims to be reading Ulysses (yeah, right), owns fantasy sports teams that almost never win, and indulges in some fieldwork with those craft beers. So basically, it's time to boost those bar budgets, folks!

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