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Business of Engineering
Blog Qualcomm just landed the biggest semiconductor deal ever at $47 billion
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  • Author Author: Catwell
  • Date Created: 2 Dec 2016 10:23 PM Date Created
  • Views 705 views
  • Likes 2 likes
  • Comments 2 comments
  • buyout
  • business of engineering
  • qualcomm
  • acquisition
  • cabeatwell
  • b2b
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Qualcomm just landed the biggest semiconductor deal ever at $47 billion

Catwell
Catwell
2 Dec 2016

image

Qualcomm announced its acquisition of smart chip maker NXP Semiconductor. Qualcomm is looking to expand their company with their latest acquisition (logo via Qualcomm)

 

Apple isn’t the only tech company looking to get ahead by gobbling up other companies; Qualcomm is getting in on it too. In October, the company announced its acquisition of smartphone chip maker NXP Semiconductor for $47 billion, making it the biggest semiconductor deal ever. Aside from making chips for smartphones and NFC payment chips, NXP also has interests in other markets, such as the automotive industry, security, and the Internet of Things. The company even claims it powers 14 out of 15 popular vehicle infotainment consoles.  It makes sense why Qualcomm is interested in the company seeing as it ventured into similar markets with varying success. It also doesn’t hurt that NXP has a customer base of around 25,000 thanks to its direct sales and global network of distribution partners.

 

Steve Mollenkopf, CEO of Qualcomm, believes this new acquisition will help the company extend their mobile tech to new opportunities. He also hopes it will lead to being better and more sufficient at giving customers what they want. He also points out buying NXP was ideal since both companies share the same goal: delivering industry-leading solutions to customers worldwide.

And of course, the money is supposed to be good. It’s already being projected that the two companies will pull in annual revenues of more than $30 billion with serviceable markets of $138 billion by 2020. But there are other benefits from this merger aside from money. Some include, becoming a leader in network processors for wired and wireless communications, the ability to give customers products and platforms at scale in the mobile, automotive, security, and IoT areas, and working together to create even better products than before.

 

So what do the two companies hope to accomplish now that they’ve merged? Making more secure connections for the world. With so much technology flying around, making sure everyone is safe and secure is more important than ever. Though it’s 2016, we still hear stories of big box stores and banks, places you would expect to know better, being hacked. NXP and Qualcomm are hoping to make our technology more secure. NXP CEO Rick Clemmer said in a statement the two companies will be able to come up with complete solutions for security issues. He hopes this in turn will enhance their leadership positions and further strengthen their partnerships around the globe, specifically in the automotive, consumer, and IoT fields.

Though the deal is done, there’s still some finalizing to do. It will face standard regulatory approvals around the world, but Qualcomm thinks it will get the okay before the end of 2017.

 

Have a story tip? Message me at: cabe(at)element14(dot)com

http://twitter.com/Cabe_Atwell

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  • rscasny
    rscasny over 8 years ago

    Beg to differ about this statement: "So what do the two companies hope to accomplish now that they’ve merged? Making more secure connections for the world. With so much technology flying around, making sure everyone is safe and secure is more important than ever." Sounds like this was pulled from Qualcomm's PR agency.

     

    FYI The semiconductor industry has been conducting a lot of M&A deals this past year. My guess is that the chips are getting more complex and costly to fabricate. Building/Managing the fab plants can get expensive. Competition causes the margin to decrease. So, they probably feel pressure. It's about money for sure. The problem is with less competition, the cost will go up and the end product could be more expensive to the consumer, which can stem development plans and innovation. Maybe be good for some parties, may not be for others.

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  • michaelkellett
    michaelkellett over 8 years ago

    Come on Cabe - get real - this is about money, not about "making sure everyone is safe and secure".

     

    In a sane world there is absolutely no way whatever that Qualcom should be allowed to buy NXP - it's competition that has made the semiconductor industry the amazing power house of innovation that we are used to and the rise of the corporate behemoths now entrenched in it is nothing but bad.

     

    One of the primary duties of government is to prevent the development of monopolies and cartels and the concentration of too much power in too few hands. In the good old days, when they broke up Standard Oil and AT & T, the US Government understood this. In the last 20 years or so the lessons seem to have been forgotten and governments in the US and Europe have allowed or even encouraged excessively large and powerful companies - they harm us all.

     

    MK

     

     

     

     

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