NXP, STMicroelectronics form giant chip shop
11 April 2008
NXP, STMicroelectronics form giant chip shop
Chip vendors NXP and STMicroelectronics have agreed to combine their wireless operations in a joint venture better equipped to target the major handset manufacturers.
Philips spin off NXP and US-based STMicroelectronics said the deal would make the new venture a "solid top-three industry player", presumably tailing Qualcomm and Texas Instruments.
STMicroelectronics will take an 80 per cent stake in the joint venture and NXP will receive $1.55bn from STM, including a control premium, to be funded from outstanding cash.
The parents have also agreed on a future exit mechanism for NXP's ongoing 20 per cent stake, which involves put and call options, exercisable beginning 3 years from the formation of the JV.
According to its founders, the joint venture will have the scale to better meet customer needs in 2G, 2.5G, 3G, multimedia, connectivity and future wireless technologies, and will own thousands of communication and multimedia patents. The JV will also integrate the Silicon Laboratories' wireless and GloNav's GPS operations recently acquired by NXP.
The new organisation will combine certain design, sales and marketing, and back end manufacturing assets from both companies that will rely on its parent companies and foundries for wafer fabrication services.
Incorporated in the Netherlands and headquartered in Switzerland, the JV will have a workforce of approximately 9,000 employees worldwide.
The parent companies expect over $250m in annual cost synergies from the JV by 2011.
To comment on any articles, please contact us at chatback@telecoms.com or have your say on our blog.
Bookmark this page
