NXP's Auto Systems Appeal to Qualcomm as It Eyes $30 Billion Deal -- WSJ
September 30 2016 - 03:03AM
Dow Jones News
By Stu Woo
NXP Semiconductors NV is one of the largest computer-chip
companies no one has heard of.
Based in a gleaming and leafy tech-industry office park in the
small city of Eindhoven, Netherlands, NXP makes chips not for
personal computers or smartphones, but rather for automotive
systems, identification cards and transit cards.
Now Qualcomm Inc. is in talks to acquire the company, possibly
for a price around $30 billion, The Wall Street Journal reported
Thursday.
NXP reported $6.1 billion in revenue and $1.5 billion in profit
for 2015. It has about 45,000 employees in more than 35 countries.
Most work in plants in China. About 2,500 are in the
Netherlands.
NXP was founded more than 60 years ago as Philips
Semiconductors, a division of Dutch giant Philips NV, before it was
sold to a private-equity consortium in 2006 and renamed. It became
a public company in 2010.
Over a Diet Coke at NXP's glassy headquarters in late August,
Guido Dierick, the company's salty general counsel and Netherlands
chief, said the firm's strategy narrowed in 2009. NXP shed some
businesses and decided to focus on only fast-growing sectors where
it could be the clear leader, including chips for air bags,
automotive infotainment systems, passports and identification
cards, transit cards and smartphone-payment systems.
"We constantly say no" to new sectors, Mr. Dierick said. "Our
strategy is to be No. 1 in the areas we've chosen."
NXP acquired Austin, Texas-based Freescale Semiconductors in
2015 for $11.8 billion, in a deal that Mr. Dierick said was
designed to shore up the company's strength in self- and
assisted-driving cars. Mr. Dierick said NXP was an expert in making
chips that were easily connectable and secure from hacking, and
that Freescale was a guru at making microcontrollers to
automatically control devices.
The acquisition "was driven by customers not wanting to deal
with dozens and dozens of suppliers," Mr. Dierick said. NXP sold
products not directly to car companies, but rather to automotive
suppliers, he said.
The company's current focus was integrating NXP with Freescale,
which completed the merger in December 2015, Mr. Dierick said.
Generally speaking, he expected more consolidation in the
semiconductor industry.
"It will certainly continue," Mr. Dierick said. "It's still a
remarkably fragmented industry."
Write to Stu Woo at Stu.Woo@wsj.com
(END) Dow Jones Newswires
September 30, 2016 02:48 ET (06:48 GMT)
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