NXP Semiconductors

Description

NXP said it was the fifth-largest non-memory semiconductor supplier in 2016, and the leading semiconductor supplier for the secure identification, automotive and digital networking industries. The company was founded in 1953 as part of the electronics firm Philips, with manufacturing and development in Nijmegen, Netherlands. Known then as Philips Semiconductors, the company was sold to a consortium of private equity investors in 2006, at which point the company's name was changed to NXP.

On August 6, 2010, NXP completed its Initial public offering, with shares trading on NASDAQ under the ticker symbol NXPI. On December 23, 2013, NXP Semiconductors was added to the NASDAQ 100. Finally, on March 2, 2015, it was announced that NXP Semiconductors would merge with chip designer and manufacturer Freescale Semiconductor in a $40 billion US-dollar deal. The merger was closed on December 7, 2015.

NXP Semiconductors provides mixed signal and standard products based on its security, identification, automotive, networking, radio frequency, analog signal, and power management expertise. With an emphasis on security of the connected vehicle and the Internet of things, the company's products are used in automotive, identification, wired and wireless infrastructure, lighting, industrial, consumer, mobile and computing applications. For example, in order to protect against potential hackers, NXP offers gateways to automotive manufacturers that prevent communication with every network within a car independently.

NXP is the co-inventor of near field communication (NFC) technology along with Sony and supplies NFC chip sets that enable mobile phones to be used to pay for goods, and store and exchange data securely. NXP manufactures chips for eGovernment applications such as electronic passports; RFID tags and labels; and transport and access management, with the chip set and contactless card for MIFARE used by many major public transit systems worldwide.

In addition, NXP manufactures automotive chips for in-vehicle networking, passive keyless entry and immobilization, and car radios. NXP invented the I²C interface over 30 years ago and supplier of products using it. NXP is also a volume supplier of standard logic devices, and celebrated its 50 years in logic (via its history as both Signetics and Philips Semiconductors) in March 2012.

NXP owns over 9,000 issued or pending patents.

Philips Semiconductors

Launch of NXP Semiconductors N.V.

Notable events

Acquisition of Freescale Semiconductor

Analysis of merger

Both have deep roots stretching back to when they were part of Philips NV (in the case of NXP), and Motorola (Freescale). Each has comparable revenue figures; US$4.8B and US$4.2B for NXP and Freescale respectively in 2013. NXP primarily focuses on near field communication (NFC) and high-performance mixed signal (HPMS) hardware. Freescale focuses on its microprocessor and microcontroller. Both companies possess roughly equal patent portfolios.

Certainly, each company brings core strengths to the combined organization, NFC from NXP and microcontrollers from Freescale. Also, both companies have been actively involved in litigation over the years as both plaintiff and defendant, so a larger and, more importantly, a more geographically diverse patent portfolio could likely prove useful in such matters. Chipworks' analysts suggest the newly merged company will divest itself of many properties as the merger progresses.

Some analysts believe cost savings after the two companies merge are expected to be about $500M dollars. Customers are ultimately divided over the consolidation of their product families and how it may affect their own development and end-products.

Worldwide sites

NXP Semiconductors is headquartered in Eindhoven, Netherlands. The company has operations in more than 35 countries, with engineering design teams in 23 countries.

NXP currently has 14 manufacturing sites, with seven test and assembly sites and seven wafer fabs:

Joint ventures and other major interests