The world of chips manufacturers has just got smaller as one big whale is about to swallow a smaller fish. The biggest chipset maker in the smartphone industry, Qualcomm, has just announced that it has reached a definitive agreement to acquire NXP, a leader in semiconductor electronics.
NXP offers a lot of semiconductor solutions for the automotive industry, but in the smartphone industry it is mostly known for being Apple’s main supplier of NFC payment chips that are included in the company’s iPhones.
According to Qualcomm, the deal has been inked at a value of approximately $47 billion, so the company will acquire all NXP’s common shares for $110 per share in cash.
The acquisition is meant to strengthen Qualcomm’s presence in the automotive industry where NXP has the upper hand, but it will also allow both companies to reach annual revenue of more than $30 billion, as well as leadership positions across mobile, IoT, RF, and networking.
Qualcomm is seen as the premium provider of SoCs (system-on-chip) for the smartphone industry, while its main competitor, MediaTek, has grown tremendously in the last couple of years, thanks to its low-cost chipsets it supplies to all handset makers around the world.
With NXP’s expertise in its portfolio, Qualcomm hopes to be able to offer more complete solutions to consumers and expand its current partnerships with its customer base, “especially in automotive, consumer and industrial IoT and device level security.”
Qualcomm announced that the transaction is expected to close by the end of calendar 2017 and that it’s subjected to receipt of regulatory approvals and, obviously, other closing conditions that such a deal might imply.
It remains to be seen whether or not NXP’s buyout will have any impact, positive or negative, on Apple’s supply chain, although it’s worth noting that the Cupertino-based company is using multiple suppliers for the same piece of hardware most of the time.
UPDATE: One of our readers points out an interesting fact: NXP was also known as Philips Semiconductors, but the company was sold ten years ago and eventually changed its name to NXP.