Media Contact

Ms. Pinchun Chou

Tel: +886-2-8978-6488 ext.669

Ms. Lindsay Hou

Tel: +886-2-8978-6488 ext.667

RSS Subscription
  DRAM  
  NAND Flash  
  Storage  
  Display  
  Consumer Electronics  
  LED  
  Green Energy  
  Internet of Things  
  Semiconductors  
  Automotive Electronics  
  Innovative Technological Applications  
       

Press Release


Qualcomm Has Given up on Acquiring NXP, and May Face More Challenges in the Future, Says TrendForce

Thursday , 07 / 26 / 2018 [ Analysts: CY Yao ]

Qualcomm, the leading manufacturer of telecommunications chips and mobile processors, announced its decision to terminate the $47 billion purchase agreement to acquire NXP, a Dutch company known for automotive and IoT chips, after China’s Ministry of Commerce failed to approve the deal. Qualcomm’s business has been influenced by the slowing smartphone sales recently, and would face more risks brought by the saturated market in the future, says TrendForce.

Qualcomm has been influenced by slowing smartphone sales and licensing business

According to TrendForce analyst CY Yao, the global smartphone market has been saturated, but it is still unclear whether 5G could bring new growth momentum to the whole industry. As the business models for 5G are not yet clear, it is uncertain whether 5G developments could lead to new replacement purchases. The market situation will still depend on the attitude of telecommunications operators in the near term.

Yao notes that, based on the performance of Qualcomm, it is hard for the company to achieve future growth with revenue from the smartphone market alone. Moreover, its lower-than-expected revenue from licensing business, QTL, may also influence the company’s profitability in the future. In order to make breakthroughs in the short term, Qualcomm would continue to strengthen the sales of RFFE products, and to increase the market share in IoT and automotive sectors.

The impacts of the failed acquisition on Chinese domestic semiconductor industry

On the other hand, China has been investing heavily in its domestic semiconductor industry, and Chinese chipmakers would buy some time for development after the failed acquisition. If the deal were approved, Qualcomm would be able to significantly improve its technical strength, develop a wider range of solutions, and diversify its customer base. This would be a huge challenge or even risk for Chinese chipmakers and the domestic semiconductor industry of China.

JAC Capital has bought RFSOI and the Standard Products business of NXP in 2016, showing that NXP has a good relationship with China-based funds. If the management board of NXP decides to sell the company, then China is bound to take action, such as buying NXP to improve the country’s technical strength in developing chip solutions.

If NXP is not to be sold, China will still continue to develop its domestic semiconductor industry. Chinese chipmakers will aim to provide domestic-made chips for automotive, IoT, and security applications.

To keep updated with our press releases, please follow our social media pages. facebookGoogle+TwitterLinkin

TrendForce Press Center Copyright Notice
TrendForce grants you a limited license to use and/or republish any of the press releases on TrendForce Press Center for any legitimate media purpose (including copy and redistribute the content of press releases in any format and via any outlets), provided that you follow these license terms:

1. Reference TrendForce as the source on your works, or include a hyperlink to the original release on the TrendForce site.
2. Do not modify any press release wording.
3. Do not modify or add hyperlinks, including but not limited to adlinks, within the press release.

If your citations of press releases contain mistakes and/or have information missing, TrendForce may, in its sole discretion, direct you to remove the content distributed via TrendForce from your site at any time and for any reason, and you agree to comply with such request.