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IoT: NXP’s Second-Largest Priority after Automotive

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NXP’s Secure Connected Devices segment

In the previous part of thos series, we saw that NXP Semiconductors (NXPI) has introduced several new products and entered into new partnerships with Microsoft (MSFT), Nanyang Technological University, and Geely to improve the safety of cars. While the growth in automotive would be visible in the long term, NXPI is currently witnessing growth in the SCD (Secure Connected Devices) segment, which contributes 24% toward the company’s revenue.

The SCD segment offers processors, power management solutions, audio codecs, touch sensors, and accelerometers to support operating systems such as mobile transaction applications and contactless POS (point of sale) systems.

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SCD revenue trend

The SCD revenue has been growing steadily as more and more countries adopt contactless payments. The segment’s revenue grew 87% YoY (year-over-year) to $592 million in fiscal 3Q16. For fiscal 4Q16, Semiconductors (NXPI) expects SCD revenue to fall 2%–3% sequentially.

The growth is likely to continue in fiscal 2017 as NXP deploys mobile mass transit solutions across ten major cities in China (MCHI). The company has strong growth potential in the long term as Markets and Markets forecasts the contactless payment market to grow at a CAGR[1. compound annual growth rate] of 21.2% to reach $17.6 billion by 2021, largely driven by smart cards.

NXP’s product development roadmap in the IoT space

NXP Semiconductors’s commitment to the IoT (Internet of Things) space is visible from its partnerships and products it unveiled at CES (Consumer Electronics Show) 2017. As we saw in the earlier part of this series, NXP has partnered with Microsoft to deliver an end-to-end advanced security solution for IoT devices using Microsoft Azure IoT Hub.

NXPI’s Modular IoT Gateway platform for smart home and building can be integrated with Microsoft Azure IoT Hub through one-touch NFC (near-field communication). With this integration, NXP’s IoT gateways can leverage Azure’s self-learning algorithms and increase the intelligence of IoT devices. For instance, the NXP Semiconductors gateway can integrate with Azure’s speech recognition engines and deliver voice control features.

NXP Semiconductors (NXPI) is also launching LPC800 and LPC54000 microcontroller series for several consumer and industrial IoT applications. NXP’s merger with Qualcomm (QCOM) would bring the intelligence feature inside the system with the latter’s Snapdragon processors.

Next, we’ll look at other new products that NXP Semiconductors developed for secure connected devices.

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