Tag: NXP

Freescale-NXP merger challenges the giants

renesas-chips (1)The proposed merger of Freescale and NXP will result in a semiconductor company that challenges the giants.

That’s according to chief analyst Dale Ford at IHS, who said the merged entity will be in the top 10 semiconductor companies in the world, outranking other giants such as Broadcom and ST Microelectronics.

He said the strength of uniting Freescale and NXP will be shown in automotive applications particularly.

NXP, formerly the semiconductor division of Dutch giant Philips, used to compete in the same market, said Ford.

But the new top 10 will look fundamentally different. By revenues, Intel will remain number one with 14.14 percent, followed by Samsung, Qualcomm, SK Hynix, US DRAM firm Micron, Texas Instruments and Toshiba.

The merged company will be second place in the micro controller market, and it will also have significant share in the digital signal processing (DSP) market, much used in consumer applications.

IHS noted in its report that Freescale is practically an exclusive source for power architecture processors – and although its share in this market is tiny compared to ARM and X86 semiconductors, it has big wins in the military aerospace market.

Two chip companies in $40 billion merger

shut-up-and-take-my-moneyTwo chip companies have surprised the world by agreeing to merge.

While the tech press focused on Apple’s watch, and non-existent car, NXP Semiconductors, and Freescale Semiconductor hatched out a super-merger in comparative quiet.

TechCrunch’s excuse for its hacks not spotting the mega-merger was because “no-one has heard of the two companies anyway.”

In the interests of educating hacks – Freescale makes embedded chips, the Internet of Things, while NXP is best known for its chips headed for cars. They are both huge and were both expected to get bigger under the trend for mobile and automotive chips.

Under the deal the two companies announced a “definitive agreement” that will see Freescale shareholders pick up 0.3521 NXP shares and $6.26 in cash for each of their current shares.

Freescale made $1.10 billion in revenue, and $63 million in net profit last quarter. NXP is larger, recording $1.537 billion in revenue, and $149 million in net income in the quarter.

Either way, this deal is huge and could put the fear of god into companies that US tech hacks might have heard of, such as Intel and AMD who would really like to get their feet under the table of the embedded market.

Now they are now facing a rival who is not only comfortably been in the market for years, but now is big enough to play the sorts of games that they play in the x86 market.

It looks like the US tech press might have to make themselves a little more familiar with the new outfit – what ever it ends up being called.

Chip revenues down

arm_chipRevenues for the global semiconductor market dropped two percent year on year to $295 billion in 2012, IDC’s latest semiconductor application forecast reports.

Consumer spending slumped in the second half of the year which had a significant impact, but this was also combined with a slowing down in industrial and other market segments too. Europe’s economic crisis leaned on the PC market and China, too, was not spending as much as had been hoped. IDC notes the “lackluster” Windows 8 launch did not prove to be the boon for PC sales manufacturers were praying for.

Cheaper Chinese suppliers pressured average selling prices and dragged down overall revenues.

Just 17 companies with revenues of a billion or more, of the 120 that IDC tracks, managed growth of over five percent for 2012. Most saw declining revenues, including the majority in the top ten. Qualcomm, Broadcom, NXP, Nvidia, MediaTek, Apple and Sharp were the few in the 25 largest companies that registered positive growth.

Intel, IDC points out, saw revenues plunge $50 billion for the year, a drop of three percent, attributed mainly to weak PC demand and failing to make significant inroads into the tablet and smartphones market. Samsung saw revenues fall six percent. Texas Instruments , at number four, saw a decline of six percent.

Qualcomm, however, was a winner – ranking third in 2012 and growing revenues 34 percent to reach $13.2 billion. IDC states that this is largely due to Snapdragon and its prevalance in modem technology.

Altogether, the top ten vendors – including Broadcom, Renesas, Hynix, STMicro and Micron, held 52 percent of global semiconductor revenues, seeing a three percent decline compared to the previous year. The top 25 companies overall declined three percent, bringing in revenue of $206 billion.

Semiconductor device types were a mixed bag. Fastest growing were sensors and actuators, but these made up just two percent of overall revenues. ASSPs represented 32 percent of overall revenues and grow four percent thanks to media, graphics, and application processors, as well as RF and mixed signal ASSPs. Optoelectronics made up six percent of the revenues, growing five person on the back of image sensors and LEDs. Microcomponents declined five percent, while memory declined ten percent, holding 17 percent of all industry revenues. Analogue declined by seven percent to account for seven percent of all revenues.

IDC’s semiconductors research manager Michael J Palma said in a statement that the challenge is to “zero in on their key value propositions”.

“Whether that is in modem or connectivity technologies, sensors, mixed-signal processing or power management, there are areas of the market showing strong potential,” Palma said. “However, competing in crowded segments with little differentiation has contributed to the slowdown in semiconductor revenues”.