With mobile phones hotter than PCs, it’s no wonder STMicroelectronics has paid $1.55 billion for 80 percent of NXP Semiconductor’s wireless division to create a wireless-focused joint venture. Everyone wants to be in the cell phone market. And for those who can’t, it’s mobile Internet devices all the way!
This deal is all about scale. STMicro is the No. 3 chipmaker for wireless chips and NXP is No. 4. Together, their joint venture will still rank third behind Texas Instruments and Qualcomm, but my guess is they combined their wireless divisions to stay in the running. In the chip world, when the going gets competitive, the competitive get bigger.
The move follows some of the logic proposed earlier this year by a French engineer who suggested NXP, STMicro and Germany’s Infineon merge. But instead of mashing three large chipmakers together, this involves pulling out specific divisions and creating a large player with singular focus — although anyone building wireless chips from 2G to LTE and Ultra-wideband to GPS can hardly be accused of a singular focus. My question is: What do they plan on calling this JV — “Alphabet Soup”?