Qualcomm to buy Dutch rival NXP for $47bn

By:
James Pearce
Published on:

Deal expected to close by end of 2017 and will see world's largest chipmaker add $10bn to its annual revenues

Qualcomm has struck a deal to buy Dutch rival NXP Semiconductors for $47 billion in one of Europe’s largest ever tech deals.

NXP is the fifth-largest non-memory semiconductor supplier in the world, with a strong presence in the automotive market, while Qualcomm is the market leader. The deal is expected to add around $10 billion to Qualcomm’s revenues, lifting it to $35 billion. 

The transaction is one of the largest in the sector to ever take place in Europe, topping the $37 billion Avago paid to buy Broadcom last year.

Sales of processors in mobiles make up more than 90% of Qualcomm’s revenues, but this is set to fall below 70% once the deal is completed, UBS analyst’s claim, as Qualcomm looks to diversify its revenue streams.

NXP has positioned itself as the leading chipmaker for connected vehicles, with its products also used in a wide range of industrial applications and Internet of Things devices. IoT is a fast-growing industry, with more than 30 billion connected devices predicted to be in use by 2020.

Steve Mollenkopf, chief executive of Qualcomm, said: “The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale.”

The agreement is subject to regulatory approval, but Qualcomm said it was confident it will close by the end of 2017.

The deal is the latest example of movement in the semiconductor space, following Sprint-owner SoftBank’s agreement to buy UK manufacturer ARM, struck earlier this year.