Published: 25 October 2016
Qualcomm is set to acquire NXP. Both the companies enjoy dominance in different fields and hence it is going to be a very profitable move. For example Qualcomm is top vendor of SoC chips for the latest Smartphones and also supplies chips to other wireless markets such as WIFI and Bluetooth. While NXP is number one microcontroller vendor in the world. NXP is also number one vendor of automotive Ics.
After initial phase of growth Qualcomm was witnessing a decline from 2015 onwards. The NXP’s numbers have been good but not satisfactory considering its acquisition of Freescale. Basic reason behind decline in numbers of Qualcomm was slowdown in smartphone market which it now plans to reverse by investing in emerging markets i.e. IOT. IOT is an area where every semiconductor company is trying to foray into but after the merger, Qualcomm would be a formidable force, tough to compete with.
Another area targeted by Qualcomm is automotive application domain. It has opportunities not only in infotainment but also in self driving cars and ADAS systems. NXP already has presence in this market.But in Infotainment section Qualcomm has the potential to carve out a place for itself with its SoC chips.