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Date: 02-03-15

Freescale and NXP merge to form 9th biggest semiconductor company in the world

The two leading analog and mixed signal semiconductor companies Freescale semiconductor and NXP Semiconductors agreed to merge their businesses to form a single company with an estimated annual revenue touching close to US$11-12 billion in 2015.

There are lot of overlapping products between these two companies. Both are the leading vendors of microcontroller chips. Both are strong in automotive semiconductor domain. There are also couple of analog mixed signal Ics both NXP and Freescale offers. It's like Freescale going back to its past status of producing both discrete semiconductors and IC chips under the brand name of Motorola. Motorola's semiconductor business was spinned off into ON Semiconductor and Freescale long time back. With NXP semiconductors having huge expertise in discrete semiconductor business, this merger news clearly tells a trend of going back to multi-domain expertise.

Below are the quarterly revenue figures of both the Freescale and NXP Semiconductor in the year 2014.
Freescale NXP revenues

In the microcontroller business, with this merger, the combined company can become world's number one vendor of microcontroller chips beating Renesas of Japan.

And in the automotive space, the combined business can have huge growth benefits by having expertise in multiple areas of automotive electronics and semiconductors. It is easy to forecast the combined business to become number one vendor in the automotive semiconductor domain, pushing Infineon to second position.

To give another important news on semiconductor industry, Japanese semiconductor companies Fujitsu and Panasonic have merged their VLSI business to form a new company called Socionext.

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