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)

Copyright (c) 2016 Dow Jones & Company, Inc.
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