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Synergy is the name of the game: NXP-Freescale behemoth

Posted: 19 Mar 2015     Print Version  Bookmark and Share

Keywords:Freescale  NXP Semiconductors  merger  IHS  microprocessor 

NXP Semiconductors' recent acquisition of Freescale Semiconductor would propel the merged entity to become the world's eighth-largest chipmaker, according to IHS. The market research firm also indicated that the newly-formed company will have a commanding presence in key industrial sectors.

Prior to the merger, NXP ranked 15th in revenue and Freescale 18th. With combined revenue last year of about $10 billion, the resulting new company would have surpassed Broadcom. Only Intel, Samsung Electronics, Qualcomm, SK Hynix, Micron Technology, Texas Instruments and Toshiba would have been bigger.

Global top 10 semiconductor makers' revenue share

Global top 10 semiconductor makers' revenue share

"The merged company's strength will be especially apparent in automotive-specific analogue applications," said Dale Ford, VP and chief analyst at IHS. "Automotive products clearly will be the biggest convergence resulting from a merged product portfolio of the Dutch-based NXP and its smaller U.S. rival."

The amalgamated NXP-Freescale would place the company in second place in the area of MCUs, which are ICs for embedded and automatically controlled applications, including automotive engine-control systems. The merged company could also affect the digital signal processing (DSP) market, where Texas Instruments reigns supreme. DSPs are an important component in the audio and video handling of digital signals used in myriad applications, including mobile-phone speech transmission, computer graphics and MP3 compression.

"While both NXP and Freescale boast diverse portfolios with complementary products, the high-performance lines of the two chipmakers have very different target solutions," said Tom Hackenberg, senior analyst for MCUs and microprocessors at IHS.

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