Since the news broke on September 26 that Qualcomm intends to acquire NXP Semiconductors, NXP’s stock has surged, reaching an all-time high of $103.92 as of the last trading day. The simultaneous rise in both Qualcomm and NXP stocks indicates that investors and institutions are optimistic about this acquisition. Currently, NXP has hired boutique investment bank Qatalyst Partners as an advisor to initiate the formal sale process. However, for this acquisition exceeding $30 billion, other semiconductor companies are also eager to participate, with reports suggesting that besides Qualcomm, Avago Technologies, Intel, and Samsung Electronics may also make a move.
Last year, NXP merged with Freescale Semiconductor, and the merged company has focused on automotive electronics, MCUs, RF, mobile payments, and other fields through asset divestitures, such as selling RF and standard product businesses. NXP has maintained a leading advantage in these areas.
At the recent 2016 NXP FTF Future Technology Summit, NXP showcased the latest BMW 7 Series sedan equipped with multiple NXP automotive chips, which enables advanced remote control features such as automatic parking. They also released the latest generation FS45 and FS65 System Basis Chips (SBCs) designed for developing reliable system-level functional safety systems while helping to reduce overall energy consumption. These new products are targeted at automotive applications, including battery management systems for electric or hybrid vehicles, electric power steering systems, automotive start-stop, and transmission control for advanced powertrain systems. The “fault silence” feature of these two chips ensures predictive responses and configurable device behavior after a fault, allowing software designers to leverage this feature to set refined system safety objectives. The adjustable “fault silence” strategy supports various system safety concepts and meets the requirements of the International Organization for Standardization (ISO) 26262 Automotive Safety Integrity Level (ASIL) D standard.
At this summit, NXP also announced a partnership with Changan Automobile and Neusoft Group to establish the “China Automotive Information Security Joint Interest Group” (hereinafter referred to as the “Group”), aimed at promoting the establishment and application of hardware-based automotive safety industry standards.
In the 77GHz automotive radar sector, NXP offers high-integration chip solutions for short, medium, and long-range applications. NXP is also the originator of V2X technology and has been working in this field for 10 years, with this technology now being adopted by automotive manufacturers. In the automotive audio solution sector, NXP has maintained its leading position.
In the MCU sector, NXP Semiconductor’s Vice President and General Manager of the Microcontroller Product Line, Geoff Lees, stated that NXP’s MCUs are designed and manufactured in China. NXP is the number one supplier globally for MCUs and ARM MCUs, and it is also the leading supplier for automotive infotainment and ePOS in China.
In the LDMOS RF device sector, NXP holds a dominant market share and has applied this technology in the home appliance sector. Their collaboration with Midea on a new type of microwave RF transistor device replaces magnetrons to achieve precise power control, laying the foundation for smart kitchen appliances.
In the mobile payment sector, NXP possesses core technologies and algorithms for RFID and NFC, holding the number one market share globally, and has engaged in deep collaboration with companies like Xiaomi in the mobile payment field.
Overall, NXP has strong technology and a wide product line in both digital, analog, and mixed-signal domains, with significant growth potential in emerging fields such as automotive electronics, mobile payments, and the Internet of Things. It is a well-balanced company, which explains why Qualcomm, Avago, Samsung, and Intel are all interested in it; currently, there are not many companies like this in the semiconductor field.
But did you know? Eight years ago, when NXP went public in the United States, its stock price fell below the issue price. At that time, I wrote an article analyzing “After the IPO, did NXP (NXP) represent value or was it undervalued?” If you’re interested, you can check it out here: http://www.eetrend.com/blog/100026551. Now, the stock price has increased tenfold since then!
In six years, the market value has grown tenfold. NXP CEO Clemmer has focused the company by continuously divesting less competitive business units, which is a strategy worth emulating for local companies.
About Semiconductor Observer
Stay updated on the latest technology trends and emerging applications in the global semiconductor industry, focusing on makers and geeks, interpreting the latest developments in the semiconductor industry. Give us a little tap, and we will be inseparable good friends!
For more information, follow and give me feedback!
Click to read the original article and view an analysis from six years ago titled “After the IPO, did NXP (NXP) represent value or was it undervalued?”