Qualcomm is Negotiating To Acquire NXP Semiconductors NV

The Wall Street Journal reported that Qualcomm is negotiating with NXP Semiconductors NV for the acquisition. This acquisition may be reach $ 30 billion or more and done in two or three months. However, it also has risk in failure as Qualcomm is seeking for other merging options.

NXP is the developer of NFC technology whose monitor is widely used by mobile devices, such as iPhone 6, 6s,iPhone 7, Samsung Galaxy S7 and Nexus 6P.

Qualcomm headquarter locates in San Diego and its capitalization value is about $93 billion.

To react the slowdown increase and intense competition in the market, chip manufacturers are seeking mergers and acquisitions to cut down their manufacturing expenses. 2015 was an important year for acquisitions, such as Intel made some acquisitions as well. NXP did acquire Freescale for $ 11.8 billion last year.

According to the statistics provided by Dealogic, the transactions made in chip industry have been over $ 75 billion this year. The layout of acquisition scale for tech industry is predicted to reach $ 463 billion this year. A few months ago, Japanese Softbank Corp acquired ARM for $32 billion.

The acquisition of NXP will basically change Qualcomm development. It has been facing much challenges in semiconductors industry in recent years, including the increase space in smartphone business. The main revenue of Qualcomm is from design business and chip sales, but over half of profit it makes is from the payment of wireless patent paid by mobile manufacturers.

This acquisition will increase the amount of Qualcomm employees. Qualcomm had 33,000 employees by September of 2015. NXP has 45,000 employees so far. NXP headquarter locates in Eindhoven, Netherlands. Its chip business is mainly for vehicle system, ID card and Bus card. It made $6.1 billion in revenue, therein $1.5 billion was profit in 2015.

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