Qualcomm agrees to buy NXP for over US$37 billion

The deal will give Qualcomm a strong position in the automotive market as the semiconductor content of cars increases

Microprocessor maker Qualcomm is spending its way out of a stagnating mobile phone industry, offering to buy NXP Semiconductors, a company with a strong position in automotive chips, for more than US$37 billion.

Qualcomm formalized its offer Thursday, barely a month after rumors began circulating that a deal was in the offing.

NXP has only just digested its own multibillion acquisition, of Freescale Semiconductor, which closed in December 2015.

The combination of Qualcomm and NXP will have annual revenue of around $35 billion, Qualcomm said. That's still well behind the $55 billion Intel reported for its full fiscal year 2015, although catching up.

NXP sells a lot of automotive chips -- they're found in many cars' infotainment systems -- but also microcontrollers, secure identification chips, network processors and radiofrequency power amplifiers.

The deal will allow Qualcomm to strengthen its position in markets such as connected cars and the internet of things, CEO Steve Mollenkopf said, announcing the deal.

That's important as the mobile phone market, from which the company makes a large part of its revenue, is slowing. Gartner expects phone sales to shrink this year, and to remain flat for the next two years, pushing Qualcomm to look for growth elsewhere.

It's not just about new markets, though. Qualcomm expects to find $500 million in annual cost savings by merging the two companies. It will spend some of its offshore cash pile on the deal, avoiding U.S. taxes that would be due if it repatriated the money.

Qualcomm expects to close the $110-per-share deal by the end of next year, subject to regulatory approval.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

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.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?