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NXP to focus on high growth opportunities going forward

Loaded with technology displays, NXP used this truck to demonstrate the capabilities of the new business

With NXP’s acquisition of Freescale now complete – a deal which valued the latter at $11.8billion – the new, enlarged company disclosed at an event in Paris how it would be looking to address high growth opportunities in the ‘smarter world’, with target areas including the smart home, industry, healthcare and wearables.

The new company, which is now the fourth largest semiconductor business in the world, will be focusing on high performance mixed signal solutions and has been structured around five key business units: security and connectivity; automotive; RF; standard products; and digital networking.

Speaking in Paris, Geoff Lees, general manager of NXP’s MCU business, said there was ‘little overlap between the two companies’ portfolios’, adding the new business was well placed to offer processors, security and software across the Internet of Things, ‘whether for the consumer, industrial, medical of automotive sectors’.

Both companies have significant positions in the industrial and automotive markets and will now, according to Lees, be better placed to develop their presence in the burgeoning market for IoT chips, where low margins mean that economies of scale will be essential if companies are to compete effectively.

A key element of the merger is the strength both companies have traditionally had in the automotive sector.

“The connected car took centre stage at this year’s Consumer Electronics Show,” suggested Lees, “highlighting the importance of both security and connectivity across the network. NXP can offer capabilities to this market from design through to effective infrastructure management.”

Maurice Gereats, senior director, new business, agreed. “NXP is number one in terms of infotainment and security and in in-vehicle networks, while Freescale has been able to bring to the new company a strong presence in safety, such as ABS, and in body electronics.

“Our presence in body electronics, safety, infotainment, networking and security means that NXP is now well placed in what is a fast developing market for secure connected vehicles.”

Lees suggested the company would be focused on bringing product to market more quickly and, when asked whether he felt the new business would be focusing more on research than had been the case in the past, he pointed to the company’s work with Samsung and the development of fully depleted silicon on insulator (FD-SOI) technology.

According to NXP, it expects to make savings of $200million in the first full year, rising to $500m. Whilst significant, they are seen to be relatively modest for a deal of this size.

Meanwhile, rumours are circulating suggesting possible layoffs. “These will most likely in our respective back offices,” according to Lees, but it is unlikely the company will embark on significant layoffs.

Recently, Freescale closed its R&D centre in Israel, with the loss of 200 engineers and there have been suggestions of layoffs in Malaysia and Texas – but as yet nothing has been confirmed.

Lees said the newly combined company would have around 11,500 engineers. “That is a significant engineering presence and they will be key to unlocking the challenges we face and delivering solutions we need going forward, whether in terms of security or connectivity.”

As part of the Paris event, a mobile truck loaded with displays demonstrating the new company’s technologies and capabilities was parked outside the venue. Similar trucks are deployed in the US and China. The vehicle will be used at events around Europe and, next month, will be seen at Embedded World in Nuremberg.

Author
Neil Tyler

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