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NXP Semiconductors is buying Freescale

hist78

Active member

http://www.nytimes.com/2015/03/02/b...ll-merge-in-deal-worth-11-8-billion.html?_r=0

"Together, NXP, which has its headquarters in the Netherlands, and Freescale, which is based in Austin, Tex., reported $10.6 billion in sales last year."

and

NXP and Freescale Announce $40 Billion Merger


"NXP Semiconductors N.V. (Nasdaq:NXPI) and Freescale Semiconductor, Ltd. (NYSE:FSL) today announced that they have entered into a definitive agreement under which NXP will merge with Freescale in a transaction which values the combined enterprise at just over $40 billion"

and

Exclusive: NXP nears deal for Freescale Semiconductor - sources | Reuters

"NXP Semiconductors NV is close to a deal to acquire smaller peer Freescale Semiconductor Ltd in a $40 billion cash and stock merger that will reshape the semiconductor industry, according to two people familiar with the matter."

"NXP is finalizing a deal to pay a little over Freescale's $11 billion current market capitalization, the people said. Including debt, the combined company will have a value of around $40 billion, the people added."


It's a "definitive agreement" so that means Samsung isn't succesfully to buy Freescale.
 
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loekf

New member
Interesting to see that the biggest "victims" of leveraged buyouts in the pre-2008 financial crises' era have finally come together. NXP just managed to free itself from debt and the KKRs of this world. Freescale has always suffered from its break-up from Motorola, loaden with debt and struggling to pay off its creditors.

There should be overlap and job losses in the MCU or automotive parts. NXP has transformed itself to a more analog company, but with Freescale (to me it seems) they get more digital (or DSP) products back. Freescale also has a MEMs portfolio, which (I guess) is interesting for NXP if they want to grow in IoT and wearables.
 

Pawan Fangaria

New member
NXP is #5 in automotives, good at chassis, safety, powertrain that drives its growth. Freescale is good in microcontrollers. So, that can be a good reason for their merger to reap the benefit of automotive growth story!
 

loekf

New member
NXP is #5 in automotives, good at chassis, safety, powertrain that drives its growth. Freescale is good in microcontrollers. So, that can be a good reason for their merger to reap the benefit of automotive growth story!

Don't underestimate NXP's MCU products..... an iPhone/iPad has 2-3 microcontrollers from NXP: the M7/M8 for sensors, the NFC controller.
 

Paul McLellan

Active member
Interesting that NXP has largely been doing everything it can to get out of digital SoC (remember all the business they had when first spun out around Trimedia, mobile, ASIC and so on) and become focused on microcontrollers, analog, LED lighting and other specialized markets. Whereas Freescale is mostly digital in networking especially. Both companies are strong in automotive and the press release claims the merged company will be #1 in that market.
 

Majeed Ahmad

New member
In fact, NXP is a market leader in the NFC space after winning sockets in the iPhone 6 for its game-changing Apple Pay service. Apple and NXP worked closely for the development of Apple Pay.
 

Pawan Fangaria

New member
Don't underestimate NXP's MCU products..... an iPhone/iPad has 2-3 microcontrollers from NXP: the M7/M8 for sensors, the NFC controller.

Yes, NXP also has good MCUs for mobile market. I was just looking at automotive space where Freescale is good at MCUs. So, to sum up, it compliments automotive market pretty well. Does that mean threat to Renesas and Infineon?
 

hist78

Active member
NXP is a spin-off of Philips and Freescale is a spin-off of Motorola. Both company each had a significant impact in the semiconductor history.

Not well known to many people is that back in 1985/1986 when Dr. Morris Chang tried to convince multinational semiconductor companies to be the founding investor of TSMC, it was very difficult. He contacted many companies such as Intel, TI, Toshiba, Hitachi, NEC, Sony, and Philips. Among them only Intel, TI, and Philips gave him a chance to do a presentation. At the end both Intel and TI said "no" to Dr. Chang and only Philips agreed to invest and do technology transfer to help start TSMC. Philips owns 28% of TSMC during the TSMC's infancy years and later gradually sold all of them with huge profit.

Philips' decision to invest in TSMC in 1985/1986 was really against then the industry common wisdom. Philips' vision, determination, and risk taking attitude were so unique and rare back then. It's so unique and rare that for the first 7~8 year after TSMC started there wasn't any serious competitor to TSMC. The reason wasn't because TSMC was so superior in technology and manufacturing. As matter of fact, TSMC started with manufacturing technology at least two generations behind leading edge foundries. The real reason was that for those precious 7~8 years, most of IDMs thought TSMC's pure play foundry model is a bad idea and will be destined for failure.

Now people think TSMC's business model is a brilliant idea but it wasn't so "brilliant" at all back then. That means by investing in TSMC, Philips' vision was literally 8 to 10 years ahead of industry!

Wish the new NXP and Freescale will continue the amazing history to drive the technology and industry forward.
 
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Majeed Ahmad

New member
hist78 thanks for sharing this brilliant piece of semiconductor industry history.

Philips Semiconductor, which later became NXP, was also the company that recongnized the strategic importance of SoCs early on, when it acquired VLSI in a hostile bid back in 1999 and made a leap forward from largely discrete silicon business toward the SoC era.
 
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Fred P

New member
This is a serious gamble for NXP. They have done very well over the past decade and Freescale still has many of the operationla bad habits it developed in the moto days.
 

user nl

Member
For those interested in an even longer perspective on Philips/NXP, process technology and the semi industry, here a historic account on
how Philips (being originally founded as a light bulb manufacturer) after the war further got into the semi industry in the
early 50's with the help of Bell Labs and RCA:

Bell Laboratories announced its point-contact transistor in June 1948: “An amazingly simple device, capable of performing efficiently nearly all the functions of an ordinary vacuum tube, was demonstrated for the first time yesterday at Bell Telephone Laboratories where it was invented.” The press release was coupled with three short papers by Bardeen, Brattain, Shockley and Pearson in the letters to the Physical Review for June 1948 of which the first of these set out in the briefest terms the geometry, performance and theory of the device. [Bardeen 1948]The importance of this breakthrough was not lost on Philips. For example, after reading the article, Verweij said to Hazeu, who was the commercial director of the Electron Tubes product division: “The content of this article will shake your department to its foundations!” [cited from Davids 2007]....................................

In 1947 Philips signed a cross licensing deal with Bell Laboratories securing a royalty free non exclusive license to Bell’s patents in the fields of telephone, appliances, systems and tubes. In return, Bell obtained a license to Philips’ Ferroxcube ferrite material. [Davids 2007] But this neither anticipated nor covered the principal applications of the point contact transistor. Cross licensing arrangements of this kind by which rights to substantial patent estates were swapped for little or no royalty were relatively common, particularly with US electronics companies. [Tilton 1971]Bell, through Western Electric, its commercialization associate, did not begin to issue licenses to its transistor patents until late 1951, after the Shockley junction transistor patent issued.There were three imperatives that dictated Bell’s licensing strategy: Firstly Western Electric knew it could not exploit the transistor in all its potential applications. The rudimentary device badly needed diversified development by many companies in order to be successful. Western Electric was accustomed to a liberal licensing strategy: But the Military intervened. The transistor had such an extraordinary military potential that for a time the Military considered classifying it entirely. But comprehensive applications information was withheld until September 1951 when Bell ran a symposium for government and institutional engineers and scientists. After this event Western Electric was permitted to grant manufacturing licenses to NATO countries. Manufacturing information remained classified and restricted to licensees. Lastly the Bell Laboratories parent, AT&T, was subject to an anti-trust suit brought by the US Department of Justice which sought to break down its monopolies. This encouraged a liberal attitude to licensing issues.
..................................................


Much more on these early developments around Philips/NXP and the first transitors here:

https://sites.google.com/site/<wbr>transistorhistory/Home/<wbr>european-semiconductor-<wbr>manufacturers/philips

user nl
 
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