NXP-Freescale merger spawns 8th largest chipmaker

NXP Semiconductors' recent acquisition of Freescale Semiconductor will bolster the merged entity as the world's eighth-largest chipmaker, IHS reported. The market analyst also revealed that the merged company will become a major player in strategic industrial sectors.

Prior to the merger, NXP ranked 15th in revenue and Freescale 18th. With combined revenue last year of about $10 billion, the resulting new company would have surpassed Broadcom. Only Intel, Samsung Electronics, Qualcomm, SK Hynix, Micron Technology, Texas Instruments and Toshiba would have been bigger.

"The merged company's strength will be especially apparent in automotive-specific analogue applications," said Dale Ford, VP and chief analyst at IHS. "Automotive products clearly will be the biggest convergence resulting from a merged product portfolio of the Dutch-based NXP and its smaller U.S. rival."

The amalgamated NXP-Freescale would place the company in second place in the area of MCUs, which are ICs for embedded and automatically controlled applications, including automotive engine-control systems. The merged company could also affect the digital signal processing (DSP) market, where Texas Instruments reigns supreme. DSPs are an important component in the audio and video handling of digital signals used in myriad applications, including mobile-phone speech transmission, computer graphics and MP3 compression.

"While both NXP and Freescale boast diverse portfolios with complementary products, the high-performance lines of the two chipmakers have very different target solutions," said Tom Hackenberg, senior analyst for MCUs and microprocessors at IHS.

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