What’s NXP Semiconductors’ Long-Term Growth Strategy?



NXP’s long-term growth strategy

Not long ago, NXP Semiconductors (NXPI) shocked its shareholders by announcing its merger with Qualcomm (QCOM), marking the biggest merger in the history of the semiconductor industry. NXP is still integrating Freescale, a merger among the top five biggest mergers in the semiconductor industry in 2015. This merger could change the industry dynamic, placing NXP and Qualcomm next to Intel (INTC) in terms of industry ranking.

The merger is in line with Qualcomm and NXP’s long-term growth strategy.

At its analyst day in May 2016, NXP stated that it aimed to be at the core of the connected smart world by offering end-to-solutions for processing, connectivity, and security. The key end markets it looks to cater to are automotive, industrial, connected devices, and IoT (Internet of Things).

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NXP-Qualcomm merger

While NXP has strong processing and security solutions, it lacks good connectivity solutions. By merging with Qualcomm, it could gain access to the most advanced connectivity solutions. Meanwhile, NXP could help Qualcomm tap the growth opportunities arising in the automotive and IoT markets.

NXP in IoT

While the $47 billion Qualcomm-NXP merger would take a year to complete, NXP is moving ahead with its growth plans in other areas. It has launched new audio wearables using its MiGLO technology, an in-ear computer that offers advanced speech amplification and dynamic noise control.

Moreover, NXP has partnered with Google (GOOG) to provide hardware solutions for the latter’s recently launched IoT platform, Android Things. NXP will supply two development kits, PICO and Argon, both featuring its i.MX 6UltraLite applications processor and base board.

In this series, we’ll see how NXP’s Freescale acquisition, its merger with Qualcomm, and its partnership with Google will support its future growth potential and 2017 earnings.


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