Chip maker NXP Semiconductors NV has agreed to buy smaller peer Freescale Semiconductor Ltd and merge operations in a deal valuing the combined company at over $40 billion.

Not as much complementary products as the Infineon/International rectifier acquisition:

This deal is following the one made by Infineon to acquire International rectifier a few weeks ago. It is another great news in the power electronics and power semiconductor world, although these two companies (NXP and Freescale) do not find as much synergies as Infineon and IR did for their acquisition.

Infineon technologies and international rectifier have complementary portfolio of products on almost all low, medium and high power semiconductors in power electronics

Infineon and International rectifiers complementary portfolio

 

NXP is the former semiconductor branch from Philips. They are now one of the big player in the power semiconductor world with a very large and widely used portfolio in low power, power management and RF for consumer electronic devices such as laptops, smartphones, tablets and home appliances or electronic home devices. NXP is also well positioned as a supplier of devices for connected objects and Internet of Things and all automotive electronics.

On the other side, Freescale was a huge player but had to face some difficulties in 2010. They layed off a great amount of staff and had to change their strategy. They outsourced much of their production. This strategic move’s objective was made to catch profits back. Now they have a good portfolio in RF and low power too. But they also have made some R&D in high power Wide Band Gap semiconductor too.

An heavy player of the power IC, Smart systems and IoT world:

Freescale also seem to have views on the hybrid and electric vehicles market. They partnered with Fuji electric to deliver 600V IGBT power modules for electric cars. They also worked on power module packaging, which is one of the main topics of innovation in the electric mobility world.

Freescale list of products to be rebranded and sold from Fuji electric, and for hybrid and electric cars.

Freescale roadmap of power modules for EV/HEV inverters

The combination of the two companies is a great asset for low power management and RF design and devices. It can also open doors to a new heavy player in power module packaging and Wide Band Gap semiconductor.

And what’s next to come in 2015?

Point the Gap believes this is not the last acquisition to expect in the power electronics world: Fairchild, Mitsubishi Electric, Renesas, ST Microelectronics, ON semiconductor… All these companies are in good or bad shape, and can be looking for targets or becoming targeted. More to come in an Insight article soon…

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