Explaining the move, Qualcomm was keen to point out how it met all the targets it had set itself in the strategic realignment plan published last year. In particular, says Qualcomm, the move not only extends its technology leadership in growth areas, but also expands its addressable market by 40%.
As I mentioned in a blog two weeks ago, the automotive sector would have been a major attractor and Qualcomm says the merged company will be a leader in automotive semiconductors and systems. But it’s not just automotive, the two companies have complementary communications technology, while the combination of their respective IoT portfolios looks – at least on paper – to be compelling.
When such deals are announced, there is always mention of so called synergies. In this case, Qualcomm is looking to save $500million a year and it looks like the hit will be taken at the interface between NXP and what used to be Freescale.
While the deal looks good on paper, the longer term question is whether it will work as well in practice.
