Menu
Chip makers NXP and Freescale plan merger, focusing on car chips and wearables

Chip makers NXP and Freescale plan merger, focusing on car chips and wearables

The deal is expected to close in the second half of 2015

Chip makers NXP Semiconductors Freescale Semiconductor are to merge, creating a US$40 billion company that, they say, leads the market in automotive chips and general-purpose microcontrollers.

The combined entity will have revenue of over $10 billion, much of it from microcontrollers and chips for cars, the companies said. As mobile phone and automobile manufacturers join forces to bring more intelligence to vehicles, and as the market for wearables and other small connected devices takes off, these markets are likely to see strong growth.

Like other chip companies, NXP and Freescale seem to be betting big on the so-called Internet of Things (IoT), a push from many tech companies to get as many devices connected to the Internet as possible. With predictions of billions of new devices getting connected to the Internet over the coming years, it could be a very lucrative market for chip makers.

However, in the meantime privacy worries are also emerging. The U.S. Federal Trade Commission (FTC) for example has already warned that constantly collecting data from connected devices could undermine consumer trust. Companies should put more effort into protecting consumer privacy and security when developing devices for the Internet of Things, it said.

The deal, described by NXP and Freescale as a definitive agreement, has still to be approved by their shareholders and several regulators. The companies expect it to close in the second half of this year. Freescale shareholders will receive $6.25 in cash and 0.3521 NXP shares for each Freescale share, valuing the company at around $11.8 billion.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com


Follow Us

Join the newsletter!

Error: Please check your email address.

Tags business issuesFreescale SemiconductorNXP SemiconductorsMergers and acquisitions

Featured

Slideshows

Sizing up the NZ security spectrum - Where's the channel sweet spot?

Sizing up the NZ security spectrum - Where's the channel sweet spot?

From new extortion schemes, outside threats and rising cyber attacks, the art of securing the enterprise has seldom been so complex or challenging. With distance no longer a viable defence, Kiwi businesses are fighting to stay ahead of the security curve. In total, 28 per cent of local businesses faced a cyber attack last year, with the number in New Zealand set to rise in 2017. Yet amidst the sensationalism, media headlines and ongoing high profile breaches, confusion floods the channel, as partners seek strategic methods to combat rising sophistication from attackers. In sizing up the security spectrum, this Reseller News roundtable - in association with F5 Networks, Kaspersky Lab, Tech Data, Sophos and SonicWall - assessed where the channel sweet spot is within the New Zealand channel. Photos by Maria Stefina.

Sizing up the NZ security spectrum - Where's the channel sweet spot?
Show Comments