Qualcomm Acquires NXP Semiconductors For $47 Billion, Bolstering Its Impact On IoT & Automotive Markets

It’s not often we wake to the news of a record semiconductor acquisition, but today is one of those days. Further proving its intent on ruling multiple markets, Qualcomm (NASDAQ: QCOM) has today announced its plans to acquire NXP Semiconductors (NASDAQ: NXPI) for $47 billion, representing debt and shares valued at $110 per.

If you’ve never heard of NXP before, you might be surprised to learn that it’s been around for over 60 years. Philips owned the company for most of its life, and in 2005, it was split off to become Philips Semiconductors. Following a majority sale to private investors in 2006, the company became NXP Semiconductors. Major focuses of the company in recent years have been on automotive, networking, and security.

Qualcomm isn’t an unknown in those industries, but this acquisition immediately gains it an enormous foothold in them, ultimately becoming a giant of giants. Over the past year, Qualcomm has expanded some of its own focus towards drones and VR, so with this acquisition, it stands firm in a great number of very important markets. We wouldn’t be surprised if the name “Qualcomm” is being uttered a little more than usual at other leading semiconductor companies today.

Qualcomm CEO Steve Mollenkopf acknowledges his company’s newly enhanced market leadership: “With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry.” He continues, “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”.

One of the most important things about this acquisition for Qualcomm is that there are few redundancies, something that should fare well for NXP’s army of 45,000 workers (11,200 of which are engineers). Given its suddenly stronger presence in the market, Qualcomm believes that it can grow its serviceable markets by around 40% to $138 billion by 2020. Just last week, Qualcomm unveiled its first-ever 5G modem; it’s clear that the company’s momentum is not waning, so that lofty target stands a good chance of being hit.