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NXP's M&A events and business adjustments in recent years

Relâche sur : 21 août 2019

Last week, there were news reports that Goodix plans to acquire NXP's Voice and Audio Solutions (VAS) for $165 million, all assets, intellectual property, and European and Asian R&D related to the VAS business. The team will be integrated into Goodix. It is reported that NXP's VAS solution is mainly used in smart phones, smart wear, IoT and other fields, and mobile phones are its main application scenarios.

NXP! The company, formerly known as the Philips Semiconductors business unit, has clearly become a recognized scent in the global semiconductor industry, and the quality of its assets has made many companies in the industry covet. Since the semiconductor industry started a wave of mergers and acquisitions in 2015, NXP is the most famous semiconductor company to be acquired, whether it is implemented or rumored.

In addition to this Goodix acquisition of NXP's VAS business, the latest M&A news is rumored that Samsung intends to acquire NXP, but so far, this is only a rumor. Prior to this, Qualcomm announced the acquisition of NXP. After nearly two years of operation, it announced the failure of the merger in July 2018. Then there is Wentai Technology's acquisition of Anshi Semiconductor, which was originally the business unit of NXP.

In October 2016, Qualcomm announced $44 billion in mergers and acquisitions for NXP.

As we all know, with the increasingly fierce competition in the field of mobile communications and the weakness of the mobile phone market, the communications giant of Qualcomm has become more and more difficult in recent years. Therefore, it is necessary to lay out emerging applications and services as early as possible. Qualcomm has taken a look at the automotive semiconductor giant NXP. As can be seen from NXP's 2018 financial report, car-related business revenue accounts for about 50% of its total revenue. In addition, NXP's mobile phone NFC, enterprise encryption chip is also an important business segment.

In automotive semiconductors, NXP has covered the high-performance processors required by ADAS and is developing an automated driving system platform. NXP is in the first place in the current high-performance processor market for automobiles.

In terms of product line, the overlap between Qualcomm and NXP is not high, and it will not achieve a monopoly in a certain field because of the acquisition. Therefore, the acquisition is relatively easy to pass through the regulatory body.

However, this high-profile merger has not been able to completely pass the review of the relevant regulatory authorities.

At the beginning of this year, foreign media reported that Samsung Electronics is considering acquiring NXP for 50 trillion won.

The reason why such news came out, an important reason is that the memory business in the first half of 2017 and 2018 has made Samsung Electronics have good cash flow, but since entering the second half of 2018, the global memory market has plummeted and prices have plummeted. This has seriously affected Samsung Electronics' revenue. In order to expand its business beyond memory and mobile phones, the industry generally believes that Samsung Electronics will actively carry out corporate mergers and acquisitions this year, which may exceed 100 trillion won. As an NXP known as a car semiconductor, it is naturally a very good target, and it is reasonable to have a relationship with Samsung.

However, shortly after the news came out, Samsung officially denied the merger rumor.

In the acquisition of NXP quality assets, the Chinese Army was unwilling, especially JAC Capital, signed three major cooperation projects with NXP in a year and a half.

In March 2015, JAC Capital and NXP announced the establishment of a joint venture company called WeEn Semiconductors Co., Ltd. and acquired the assets of NXP in Jilin. WeEn officially opened in January 2016 to develop and produce power semiconductor devices and operating headquarters. Settled in Shanghai.

In May 2015, NXP sold its RF Power division to JAC Capital for $1.8 billion, which was the largest amount of China's acquisition of overseas semiconductor assets at the time.

JAC Capital's $1.8 billion acquisition of NXP's RF Power business has indeed resulted in a quality asset, which is the first time that China Capital has implemented a global leader in international assets, international teams, technology patents and R&D capabilities.

In June 2016, NXP announced an agreement with an investment consortium of JAC Capital and Wise Road Capital LTD to sell NXP standard products to the investment consortium. Under the terms of the agreement, the investment consortium will pay approximately $2.75 billion to NXP. The transaction was completed in the first quarter of 2017. Upon completion of the transaction, the standard product business unit became an independent company called Nexperia.

Nexperia is undoubtedly a premium asset, and it is an industry leader in discrete devices, logic devices and PowerMOS. According to the 2015 annual report, NXP's annual operating income was 6.101 billion US dollars, and standard product business revenue was 1.241 billion US dollars, accounting for about 20.34%. Nexperia integrates design, manufacturing, and testing, and is a typical vertically integrated semiconductor company with strong profitability.

From the global ranking of market segments, Nexperia diodes and transistors ranked first, logic devices ranked second (after TI), ESD protection devices ranked second, small-signal MOSFETs ranked second, and automotive power MOSFETs ranked second ( Second only to Infineon).

In April 2018, China's domestic mobile phone ODM leading company WINGTECH and YUNNAN HONGHE GUANGMING CO., LTD., Shanghai and other funds spent 11.4 billion, taking over the share of Nexperia held by Hefei Core Screen Industrial Investment Fund (Limited Partnership) Seventy percent became the largest shareholder of Nexperia.

In recent years, although NXP has sold a lot of high-quality assets and acquired some businesses, the overall number is small. The most impressive impression is that in 2015, NXP acquired Freescale. The deal was formally proposed in March 2015 with an acquisition value of $11.8 billion. If the Freescale debt is included in the transaction price, the acquisition amount is as high as $16.7 billion. The NXP from the Philips Semiconductors division has a relationship with Freescale, which is independent from Motorola's semiconductor division. Both companies were separated from the parent company after the semiconductor business divestiture in 2000, and both were acquired by private consortia, and later Being operated on the market.

As mentioned earlier, NXP sold its RF Power business to JAC Capital, not because the business is behind, but because it is clearing the way for the acquisition of Freescale, NXP ranks second in the world of high-power RF power amplifiers, Freescale The business segment has stronger strength and its RF power amplifier market ranks first. Therefore, in order to avoid asset duplication and avoid the risk of monopoly litigation, after weighing, NXP decided to sell its RF Power business.

In addition, a recent acquisition occurred recently. In May of this year, NXP announced the acquisition of Marvell's wireless connectivity business for $1.76 billion. The main product line involved was Marvell's Wi-Fi and Bluetooth connectivity products. NXP's acquisition is mainly to reinforce its wireless communications capabilities in the industrial and automotive sectors.

Although NXP's core competitiveness is in the automotive semiconductor field, especially its main line of processors and microcontrollers, some of the product lines sold in recent years have semiconductor products for automobiles, such as RF Power, standards. Product business, etc. It can be seen that the company is undergoing a series of more complicated business and product line adjustments, especially after the failure of the merger with Qualcomm, these adjustments will certainly be further deepened.