In October 2016, Qualcomm announced the acquisition of NXP Semiconductors. After nearly 20 months, this opportunity to become the largest in the history of the semiconductor industry is still being postponed.
Since the sales of Qualcomm and NXP products are global in scope, there is a monopoly on the merger between the two parties. Therefore, according to relevant requirements, the transaction needs to be approved by the antimonopoly regulatory agencies of nine countries around the world. Currently, China’s regulatory agency is the only one that has not yet granted approval. .
On June 15, the South China Morning Post, including the Bloomberg and Reuters media, reported that Chinese regulators had agreed to the Qualcomm NXP transaction. However, Reuters cited its sources to refute the news, saying that the Chinese Ministry of Commerce has not yet approved On the same day, Qualcomm stated that it will extend the cash offer for NXP Semiconductors by one week, and the quotation will expire on June 22.
Qualcomm Acquires NXP for China's Approval Chip giant Qualcomm has long been in a monopoly position in the baseband chip market, accumulating a large number of necessary patents for wireless communication standards such as CDMA, WCDMA, and LTE. As of January 31, 2018, Qualcomm’s market value was US$101.04 billion; According to Gartner, an IT consulting firm, 2017 Qualcomm ranked fifth in the global semiconductor industry with a revenue of US$17.06 billion.
NXP Semiconductors, formerly known as Philips Semiconductors, was separated from Philips in 2006 and has become the world’s largest automotive semiconductor company, providing automotive electronics, smart identification, home entertainment, mobile phones and personal mobile communications, and multiple market semiconductors. Products and solutions in other areas. As of January 31, 2018, NXP’s market value was US$40.74 billion. In 2017, NXP’s revenue was US$8.65 billion and ranked the 10th among global semiconductor companies.
Because Qualcomm acquired NXP's alleged monopoly, it needs approval from nine countries and regions around the world. On January 18 this year, Qualcomm announced that South Korea and the European Union have approved the transaction, which means that only China has not made a decision.
In response to this issue, Time Finance contacted the person in charge of Qualcomm China and the other party said it was inconvenient to respond. As of this writing, Times Finance did not receive a reply to an interview email sent to the person in charge of NXP Greater China.
Previously, Chinese companies expressed concern that this acquisition will expand Qualcomm's patent licensing business to mobile payment and autopilot.
Yao Jiayang, an analyst at TrendForce's Tiepi Industrial Research Institute, said that after the merger of the two companies, the impact on the mainland chipset will probably be related to the development of mobile phone chip makers such as Ziguang. The long term is due to the mainland There is still room for efforts in the area of chip use, so even if Qualcomm completes the acquisition of NXP, the two companies will have a combined effect in the automotive industry. This will also drive the gap between the automotive chip makers in the mainland.
On April 16, Qualcomm submitted a new application to the Chinese government. On April 19, the spokesman of the Ministry of Commerce of the People's Republic of China stated that the Ministry of Commerce is acquiring Qualcomm’s shares in NXP Semiconductors in accordance with the relevant provisions of the Anti-Monopoly Law. Review of the case. As the transaction will have far-reaching effects in the industry, it may be detrimental to market competition. For the remedial measures already proposed by Qualcomm, Peak said that the preliminary feedback from the market test carried out by the investigation agency concluded that Qualcomm's solution is difficult to resolve. Market competition issues. '
At present, Qualcomm and NXP have extended the validity period of the purchase transaction from April 25 to July 25. Prior to this, both parties have extended the validity of the transaction several times. If this is the end of the set July The deadline is still not approved. Qualcomm will pay NXP 2 billion U.S. dollars in 'break-up fees' in accordance with the agreement to end the transaction.
Acquisition failure will be damaged
In the eyes of the outside world, the merger of these two powerful semiconductor manufacturers is highly complementary. TPI has stated that Qualcomm’s move will intensify competition in the global semiconductor industry, and it will also bring a new brand to Qualcomm itself. Market opportunities and challenges.
'For the automotive electronics market, and to expand the influence of other non-smart phone markets, such as embedded, Internet of things, and Netcom infrastructure, to further diversify market risks. ' Talking about the reasons for Qualcomm's acquisition of NXP, analyst Yao Jia Yang's analysis of the era of financial business, in addition to business development, to consolidate its position in the smart phone market is also the purpose of Qualcomm.
Basically, NXP has a certain influence on the secure payment of smart phones around the world. In other words, in the field of information security, NXP has its leading position. In contrast, Qualcomm has strengthened its processors in the past two years. The performance of the field, but considering the more application services brought by the upcoming 5G, the performance of information security capabilities, Qualcomm's acquisition of NXP, also helps to consolidate the leading position in the smartphone.
Recently, the first international 5G standard was formally released. With the advent of the Internet of Everything, automatic driving and the Internet of Things industry will be greatly developed. For Qualcomm, whose business is mainly focused on mobile phones, the acquisition of NXP is even more urgent.
However, if the acquisition fails, in addition to the above-mentioned break-up fees, it will also cause no small blow to Qualcomm.
Yao Jiayang pointed out to Time Finance that if the transaction fails, Qualcomm's future operations will be very risky. 'Given that the growth of the smartphone market is already a 'nearly stagnant' situation, although 5G will have a chance to usher in a wave of new The growth momentum, but because the business model derived from 5G is not clear, even if the download speed is greatly improved, whether it will drive a new wave of replacement may depend on the attitude of the telecommunications industry.
Looking at the current situation, the general market does not have a very optimistic atmosphere. In general, the smart phone market is viewed with a 'prudential layout'. Therefore, Qualcomm's smart phone market alone cannot sustain the growth momentum of revenue. Even if there is any improvement, it may affect the performance of profitability. In addition, Qualcomm's performance in the authorized business (QTL) may not be too optimistic in the near-term. Qualcomm’s overall performance may not be too optimistic.