Three Colorful Bytes from the NXP History

The proposed merger of NXP and Freescale, which creates a bigger semiconductor outfit, also brings forth some fascinating history bytes from the technology heritage that these two spin-offs carry from their respective corporate parents. In 2006, Philips Electronics sold its chip business division Philips Semiconductors to a consortium of private equity investors. The name NXP stood for the consumer’s “next experience.”

Likewise, Motorola Inc. made the Motorola Semiconductor Products Sector autonomous in 2004 and renamed the new silicon-focused outfit as Freescale Semiconductor. This blog traces some parts of the NXP heritage that spans over the past four decades.

NXP: A Fabless Model Pioneer

The Semiwiki Forumuser hist78 has chronicled how TSMC’s Morris Chang found a small audience among semiconductor companies for his revolutionary idea of a pure-play fab back in the mid-1980s. Intel, TI, and Philips gave him a chance to make a presentation, and eventually, both Intel and TI said no.

Philips’ early investment and technology transfer were vital in TSMC success

It was Philips Electronics that agreed to invest and do the technology-transfer to help jumpstart TSMC while owning a 28 percent stake of TSMC during its formative years. Later on, Philips gradually sold all of its shares in TSMC with huge profit, but that’s another story. In retrospect, it was Philips decision to invest in TSMC during the mid-1980s that kick-started the fabless revolution, which in turn, changed the semiconductor landscape forever.

Buy VLSI, Buy SoC

San Jose, California–based VLSI Technology was a pioneer in ASIC, SoC and semiconductor process technologies. It became an early vendor of standard cell ASICs during the early 1980s and dominated the PC chipsets business in the next decade. In 1999, Philips Semiconductors—the precursor of NXP Semiconductors—made a hostile bid for VLSI Technology and eventually acquired the ASIC pioneer for around a billion dollars.

VLSI was an ASIC and SoC pioneer

Apparently, Philips faced difficulties in custom designs quickly moving to new process generations, an area where VLSI excelled with its broad array of chip design libraries and tools. Moreover, the purchase seemed to be stimulated by Philips’ growth and success in the mobile handset chips business. The VLSI buy went a long way for the Dutch company in the unfolding SoC era that followed in the years after this acquisition.

NFC: First Invent, Then Rescue

NXP is a pioneer in near-field communication (NFC) technology; its parent company Philips Electronics developed and launched the contactless access technology in collaboration with Sony back in the early 2000s. The NFC technology was originally developed for the transport and convenience store segments in large Asian cities like Hong Kong and Tokyo. The NFC-based Octopus Card for Hong Kong’s subway service has been a smashing success.

Hong Kong’s Octopus Card: An Early NFC Success Story
(Image: MLP Forums)

But it was tap-to-pay mobile service where NFC was going to make it big. Mobile commerce advocates said that cash would become a thing of the past and that the future of digital money was inside the NFC chip residing in smartphones. However, the promise of mobile payments remained in doldrums until 2014, when Apple and NXP joined hands to develop the first viable tap-to-pay service on the iPhone 6.

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Apple Pay—a hugely successful mobile payment service that provided a seal of approval to the NFC technology—used an NXP SoC device that combined the Secure Element (SE) microcontroller with an NFC radio. The SE-centric hardware in the iPhone 6 allowed over-the-air provisioning by the banks and credit card companies and kept mobile operators out of the payment ecosystem.

Majeed Ahmad is author of books Smartphone: Mobile Revolution at the Crossroads of Communications, Computing and Consumer Electronicsand Mobile Commerce 2.0: Where Payments, Location and Advertising Converge.