Chip makers NXP and Freescale plan merger, focusing on car chips and wearables

The deal is expected to close in the second half of 2015

Chip makers NXP Semiconductors Freescale Semiconductor are to merge, creating a US$40 billion company that, they say, leads the market in automotive chips and general-purpose microcontrollers.

The combined entity will have revenue of over $10 billion, much of it from microcontrollers and chips for cars, the companies said. As mobile phone and automobile manufacturers join forces to bring more intelligence to vehicles, and as the market for wearables and other small connected devices takes off, these markets are likely to see strong growth.

Like other chip companies, NXP and Freescale seem to be betting big on the so-called Internet of Things (IoT), a push from many tech companies to get as many devices connected to the Internet as possible. With predictions of billions of new devices getting connected to the Internet over the coming years, it could be a very lucrative market for chip makers.

However, in the meantime privacy worries are also emerging. The U.S. Federal Trade Commission (FTC) for example has already warned that constantly collecting data from connected devices could undermine consumer trust. Companies should put more effort into protecting consumer privacy and security when developing devices for the Internet of Things, it said.

The deal, described by NXP and Freescale as a definitive agreement, has still to be approved by their shareholders and several regulators. The companies expect it to close in the second half of this year. Freescale shareholders will receive $6.25 in cash and 0.3521 NXP shares for each Freescale share, valuing the company at around $11.8 billion.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsbusiness issuesFreescale SemiconductorNXP Semiconductors

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Loek Essers

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?