The partnership of NXP Semiconductor and Freescale Semiconductor will create a $4 billion semiconductor giant with annual automotive chip sales of during slightest $1 billion some-more than a closest rival, Renesas. After a understanding closes in a second half of 2015, rivals will be faced with a new attention personality with a extended product portfolio that can contest in many automotive chip segments.
Many automotive chip companies have already done their pierce with mergers and acquisitions that took place before to proclamation of a NXP and Freescale deals and these have had a vital impact on a automotive semiconductor space, according to Luca De Ambroggi, principal researcher for automotive semiconductors during IHS Technology.
For example, a acquisition by Cypress Semiconductor of Spansion in Dec 2014 was encouraged by a organic expansion of Spansion’s microcontroller business in a automotive realm. Qualcomm’s partnership of CSR was due in to Qualcomm wanting to enhance a reach in a automotive integrated circuits (IC) world. ON Semiconductor wanted to boost a picture sensor business—particularly in a automotive sector—so it went out and grabbed Aptina. Earlier this year, Lattice nabbed Silicon Image in sequence to contest in a connected and wireless connectivity space including a automotive market.
“While these deals will change a automotive chip landscape, it is some-more of a tellurian plan among semiconductor vendors,” says De Ambroggi. “As mergers, by definition, revoke a series of IC sources and a product offerings on a marketplace as a whole, those left behind competence have difficulty competing.”
De Ambroggi says that something competence be function in Japan as good in terms of an acquisition, nonetheless he declined to state who competence be a appropriation party. Renesas, a stream automotive semiconductor personality (which will be replaced by a NXP-Freescale merger), has been rumored as a probable appropriation company, though has so distant been wordless on that front.
While a overlie of products in a NXP-Freescale partnership is limited, competing companies competence accept combined business if strange apparatus manufacturers (OEMs) are not peaceful to overexpose their prolongation to a singular semiconductor supplier. “In this case, OEMs regulating both NXP and Freescale competence need a second source, providing expansion opportunities for competitors,” says De Ambroggi.
The NXP-Freescale partnership will give a new association inroads into scarcely all of a automotive semiconductor segments. With a use of Freescale’s ICs, a association could aim unconstrained pushing systems including automotive puncture braking and adaptive journey control. It could also use Freescale’s clever position in hybrid-electric vehicles to turn a widespread retailer of vehicular wireless communications (V2X) and dedicated short-range communication (DSRC) wireless chipsets.
Beyond these possibilities, De Ambroggi says NXP and Freescale competence join army to dig a modernized motorist support systems (ADAS) and infotainment markets. NXP recently announced a interrelated metal-oxide semiconductor (CMOS) radar product and Freescale has been a personality in silicon-germanium (SiGe) radar.
“The expansion of CMOS will offer new formation possibilities—add a microcontroller to radar for example—that will revoke a altogether radar cost point,” says De Ambroggi. “However, SiGe will substantially still sojourn improved positioned for high opening applications, during least, in a brief term.”
This could yield outrageous expansion opportunities for a joined company. IHS forecasts that a ADAS semiconductor marketplace could be value $3 billion by 2020.
Other areas a joined association competence pierce into after a understanding is inked embody vehicle-to-vehicle (V2V) communications—an critical record in self-driving vehicles that is set to soar after 2020—and automotive night vision, a niche marketplace with record that could be used for worldly self-driving functions.
Questions or comments on this story? Contact [email protected]
- NXP to Buy Freescale for $11.8 Billion
- Cypress, Spansion Agree to $4 Billion Merger
- Qualcomm Grabs CSR For $2.5 Billion
- ON Semi to Buy Aptina for $400 Million
- Lattice Semi Snaps Up Silicon Image