NXP Semiconductors NV Considers Possible Sale to Qualcomm
Phenny Lynn Palec | | Oct 01, 2016 03:42 AM EDT |
(Photo : Getty Images/CNBC) Qualcomm display at CES 2016, the annual Consumer Electronics Show, in Las Vegas, Nevada.
Recent reports have suggested that NXP Semiconductors NV is currently exploring the possibility of selling the company to Qualcomm, a prominent semiconductor company known to provide chips to prominent smartphone manufacturers.
Sources familiar with the matter said the deal could be valued at more than $30 billion, but negotiations are still in its early phase. It was also noted thaat NXP is open for other offers should they emerge.
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According to The Wall Street Journal, which first reported of the talks between NXP and Qualcomm, if things go well with the negotiations, a deal could be signed within the next two or three months. This will help expand Qualcomm's portfolio, as it pushes its market into the automotive industry.
In December 2015, NXP acquired United States-based Freescale Semiconductor for $12 billion. The deal created the world's biggest manufacturer of automotive electronics and essentially doubled the percentage of the company's auto-related revenue to 40 percent. The deal is also cited by many market analysts as part of NXP's strategy to attract interest from larger semiconductor companies such as Texas Instrument and Broadcom, according to Reuters.
On the other hand, many market analysts agreed that Qualcomm is seeking to diversify its revenue as the smartphone market, which constitutes majority of the company's revenue, is starting to decline. Moreover, Qualcomm is also facing stiff competition from semiconductor manufacturers based in Taiwan and China.
It is worth noting that Qualcomm gets majority of its revenue from microchip sales to major smartphone manufacturers like Apple and Samsung.
TagsQualcomm, NXP, Semiconductor, qualcomm news, NXP semiconductor, NXP Semiconductors NV Qualcomm
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