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QCOM to buy NXP? This is interesting

Clearly QCOM wants into the automotive market. I fully expect this consolidation to continue so expect more from the top semiconductor companies. Maybe Broadcom will buy Xilinx? I'm pretty shocked Marvell is not on the chopping block.
 
The combo would make a lot of sense, not just as a foothold into the auto market for QCOM. NXPI is a leader in NFC, which would be very complimentary to QCOM's leadership in wireless. NFC has become a must have feature in smartphones, and QCOM will be able to integrate NFC into it's future SoCs.
 
Qualcomm for NXP: A Good Use of Cash, Says RBC - Tech Trader Daily - Barrons.com
It looks like Qcom is running around like a headless chicken, but with cash. It also seems an admission that Qcom is not able to make any headway into uP or server market. Given that Google is likely to announce laptop with Andromeda OS, Qcom has either missed the trick or gone way behind in 'diversifying'. Automobile market is still led by Infineon, which sort 'some' part of it to Intel and NXP-Freescale merger itself will take some time.
 
"Chicken with its head cut off"? Hardly. How can one be both guilty of sitting out the consolidation wave, and flailing at acquisitions aimlessly?
In fact, their biggest acquisition to date was Atheros, and it cost them a tenth of what's being rumored for NXP. They are deliberate and circumspect when they do become acquisitive, arguably to their detriment.
 
From probably a technical side, ARM can be one 'unifying' link for Qualcomm/NXP/Freescale, but then ARM-Intel have a manufacturing agreement. Not sure how it is going to pan out.
 
QCOM is hardly looking like a headless chicken, this merger makes a ton of strategic and financial sense. From the financial side, QCOM has about $30b of cash/short term investments on the balance sheet, and carrying that amount in cash is a drag on ROE. The Netherlands is also a tax advantaged jurisdiction, so shifting some assets over there could lower QCOM's effective tax rate. From a strategic standpoint, as I mentioned before, QCOM's SoCs would likely benefit by the integration of NXPI's NFC capabilities, and likewise, many of NXPI's products could benefit from the integration of wireless capabilities. The combined product portfolio could be made much stronger. Even above $100/share for NXPI the price is reasonable.

What's not to like?

I also agree that XLNX could be the next big semi takeout candidate, with Broadcom being a likely suitor, but Hock Tan has shown a great deal of discipline when it comes to price and XLNX has a bit of a takeover premium built into it's price right now.
 
NXP stock value over the past 5 years greatly outpaced the DJI and NASDAQ, although the past 12 months have seen a choppy stock value, so let's see what Qualcomm can do to fill the fab and keep customers happy.

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