Source: Caijing National Weekly
1. Qualcomm's key to the future intelligent IoT chip market has failed.
Before the arrival of the China National Market Regulatory Authority's further review stage (August 15, 2018), Qualcomm no longer has the patience to choose to abandon the acquisition of Dutch semiconductor company NXP.
Qualcomm stated on July 26 that the transaction period agreed with NXP had expired, the acquisition was terminated, and the latter was paid a $2 billion acquisition termination fee.
This spanned 21 months, the transaction amounted to 44 billion US dollars, requiring 9 national regulatory audits, the largest chip mergers and acquisitions in the history of the world, and finally yellow.
When asked why they did not continue to extend the offer and give Chinese regulators more time, Qualcomm CEO Steve Morenkov said that Qualcomm needs to provide certainty in addition to mergers and acquisitions, 'not only To determine the nature of investors and partners, we also need to give our employees certainty. '
Such an answer seems calm and decent. However, the heartbeat is that, except for the '$2 billion' break-up fee, which is equivalent to 8.95% of Qualcomm’s revenue last year and 80% of net profit', the future of the IoT chip market is magnificent. The layout was frustrated, and the crowds who watched the excitement lamented: Qualcomm was not hurt this time.
Dream crush
Since the first acquisition of NXP by Qualcomm in October 2016, the acquisition has shocked the global semiconductor industry.
Industry insiders relish the marriage match between the two parties: Qualcomm is the world's largest mobile computing and communication chip manufacturer, especially in the field of mobile communications, almost monopolized; NXP is not as good as Qualcomm, but in automotive chips, microcontrollers Chips, financial IC card chips, mobile payment chips and other fields occupy a leading position.
If Qualcomm can acquire NXP, it can combine its smartphone chip business with all smart Internet products, rapidly expand the chip business map, and promote the diversification of business into an international super semiconductor giant that is almost unmatched.
Even Steve Morenkov has publicly stated, 'Let Qualcomm's leading SoC (Integrated Circuit Chip) capabilities and technology roadmap, with NXP's leading industry distribution channels and in automotive electronics, security and the Internet of Things. The combination of the advantages, I believe we will be able to enjoy the ability to enjoy the smart connected world.
At that time, some analysts wrote that once this acquisition is successful, Qualcomm will also receive more than ten semiconductor fabs and packaging test plants under NXP, so as to open and control from chip design to manufacturing, packaging, testing. The entire chip industry chain, the ability to control the main chip business of global consumer electronics products is further enhanced.
On this basis, the independent development of multiple strategic emerging industries in the back-end application market will also be deeply affected. Specifically, with the new round of technology transformation focusing on 5G, smart cars, artificial intelligence, and the Internet of Things When the wave comes, if Qualcomm uses its commercial advantages to those markets where NXP is dominant, there will be more downstream strategic emerging industries entering the 'Qualcomm model'. This range of influence is unimaginable.
Unfortunately, in a few months, the merger did not end up with the investor's anxiety. Qualcomm chose to withdraw $44 billion of 'brothers' from NXP before the end of the Chinese regulatory review, paying $2 billion to break up. Fee', the largest acquisition in the history of semiconductors.
External worry
Perhaps considering the negative impact of this news, the first time the marriage broke, Qualcomm announced the cancellation of the original $10 billion stock repurchase program, instead of repurchasing $30 billion in stocks, hoping to boost the stock price once.
As of July 26, the US stock market closed, Qualcomm rose 0.97%, which is an explanation for stock market investors.
But what makes Qualcomm's board a headache is that after the fresh and hot 'Apple's next-generation iPhone no longer uses Qualcomm's wireless chips, or will embrace Qualcomm's rival Intel' news, how can Qualcomm give itself a perfect account?
The rise of Qualcomm originated from the early deployment of the mobile communications market. In the era of smart phones, Qualcomm pressed Intel and other established competitors to become the dominant player in the field of mobile phone chips.
Regardless of market share or technology, Qualcomm 'dictatorship' is in power, refuses to authorize other chip design companies, but collects patent fees directly from mobile phone manufacturers. More than one mobile phone manufacturer has complained that Qualcomm's patent fees are too high, especially in 2016. The Meizu patent infringement case has made more people aware of an open secret in the industry.
Mobile phone manufacturers pay 5% of CDMA series technology license fees when using Qualcomm chips; even if they don't use Qualcomm chips, they have to pay Qualcomm's patent license fees, because as long as mobile phone manufacturers design mobile phones support 3G/4G networks, they will not be available. Avoid using Qualcomm's wireless communication technology. Even if it is as strong as Apple, it must pay Qualcomm a patent grant of $2 billion a year.
But now, Qualcomm's high wall has appeared loose: Huawei has consciously used the independently developed Kirin chip on the Mate series of mobile phones since 2014; Samsung has reduced the use of Qualcomm chips in this year's Galaxy S9, and plans to Other mobile phone manufacturers recommend selling their own research and development chips; the latest exposure of 'Qualcomm lost Apple's next-generation iPhone orders' is likely to be snatched by rival Intel.
The stagnation of the global smartphone market has made the competition even more anxious: In 2017, the global smartphone market experienced its first decline in history, and in the two quarters that have passed in 2018, the market has continued to decline.
Yao Jiayang, an analyst at Jibang Tuoyu Industry Research Institute, believes that since the growth of the smartphone market is already 'almost stagnant', although 5G has the opportunity to usher in a new wave of growth momentum, will it bring a new wave? 'Change the tide' depends on the attitude of the communications industry. At present, the market generally adopts the attitude of 'careful layout' to look at the smartphone market.
The implication is that the chip maker's mobile phone market will have great growth in the future, which is not very optimistic. Whether Qualcomm's mobile communication business can grow at a high speed is not objective.
Internal suffering
The more headache is still from Qualcomm.
IT observer Yan Yongqing said that under the current competitive situation, the biggest significance of Qualcomm's acquisition of NXP is ' at least put the eggs in two baskets'.
After swallowing NXP, Qualcomm can use NXP's advantages to reduce its reliance on the mobile phone business, and to solve the problem of the city's business, and the second can add smart agents to promote its transformation to a broader chip market.
Qualcomm's main business has been divided into QCT (Qualcomm Semiconductor Business) and QTL (Qualcomm Technology Licensing). In terms of financial reports, these two main businesses account for almost 90% of the revenue, cars In the emerging fields such as the Internet of Things, revenues account for only about 10%.
In the 5G era, 5G applications are no longer limited to mobile phones, but will be widely distributed in the broader Internet of Things. Qualcomm is also aware of the need to find other incremental markets for mobile phone accidents.
'Qualcomm has found opportunities for market growth in many areas, including mobile Internet of Things, IoT security, mobile computing, in-vehicle information processing, in-vehicle infotainment, etc. Brian Modoff, executive vice president of Qualcomm Strategy and Corporate M&A, said he is very optimistic Market potential of the Internet of Things and the automotive industry.
He also revealed that in 2017, the total revenue of the Internet of Things, automotive, and mobile computing businesses reached US$3 billion, and the Internet of Things will become the second largest market for Qualcomm, with potential market opportunities of $43 billion.
But now, these two eyes are gone, and the future transformation of Qualcomm will not go well.
On the one hand, Qualcomm has obvious shortcomings in the field of Internet of Things. 'Qualcomm lacks a product line for microcontrollers (MCUs) and sensors for IoT. ' Yao Jiayang said, and NXP is in the MCU market of the Internet of Things. Leadership and sensor solutions are relatively complete, and these are important in the IoT market.
On the other hand, Intel, Google, NVIDIA, etc. are all working on car chips, especially Intel and Nvidia. The former is in the forefront of losing money in the mobile phone chip market, while the latter has been screaming forward. The R&D cooperation with major car companies is progressing rapidly. Qualcomm has not yet highlighted its obvious advantages in this field.
In an interview with foreign media, Steve Morenkov said that Qualcomm can prosper without NXP, because Qualcomm still has leading technology advantages and a clear strategic plan for the future.
Will the future be like this? The cold market and the competitors who are eyeing should give the answer.