What's next with Qualcomm?
MADISON, Wis. — Now that Qualcomm has formally announced its purchase of NXP Semiconductors, it’s time to examine the deal’s potential consequences.
As symbiotic as the deal seems — with both CEOs stressing the companies’ mutual affinity at the time of the announcement — the birth of a $35 billion chip company will have repercussions. It will affect both the combined companies’ internal operations and competitors on the market — especially in the automotive segment.
How big will be the impact on the global automotive market? More important, what significant changes, if any, will this union bring to the automotive industry?
Potential areas of conflict, overlap and opportunity for Qualcomm and NXP include semiconductor process technologies for future automotive SoCs, pitting fully depleted silicon on insulator (FD-SOI) supported by NXP against the bulk CMOS which Qualcomm has mastered as a big volume SoC vendor, and the future of connected cars, with NXP promoting DSRC (dedicated short range communications)-based V2X and Qualcomm on LTE-based solutions.
Expect some internal fights over the processor architecture (Snapdragon vs. i.MX8) that will dominate In-Vehicle Infotainment systems, ADAS and eventually autonomous driving platform.
Also undetermined is how Machine Learning will be developed by the new entity. Richard Clemmer, NXP CEO, revealed that NXP has had “no internal technology development going on” in machine learning, although NXP has been the leading chip vendor in the automotive market until now.
In the following pages, EE Times will break down potential issues and identify conflicts and overlaps among competing technologies and products owned by the two companies.
When the transaction is completed a year from now (expected at the end of 2017), one thing is crystal clear: Qualcomm will be a genuine powerhouse in the automotive semiconductor market.
Combining the companies’ automotive revenues for 2015, Qualcomm stacks up as a $3.7 billion automotive chip supplier. As Ahad Ahmed Buksh, analyst of Automotive Semiconductors at IHS Markit pointed out, that is “$1 billion more than Infineon, the second biggest in the global automotive market.”
Looking back on Qualcomm’s history, its ascension is remarkable.
IHS ranked Qualcomm 41st in the automotive chip market in 2014. The San Diego-company climbed to 20th in 2015 through the acquisition of CSR. The NXP acquisition puts it at No. 1.
As the electronics content inside vehicles rows exponentially, Qualcomm is poised to buy its way into every new car. As Buksh summed up, “Qualcomm would bring itself to the pinnacle of the automotive semiconductor market in just two years.”
No wholesale cuts?
Most analysts don’t expect any immediate dispositions of certain product lines or groups from each company. Kevin Krewell, principal analyst at Tirias Research, told us, “Overall, I see most of the product lines as complementary. I expect there will be some reorganization of products, but I don't see wholesale cuts in product offerings.”
When it comes to the processor cores, NXP uses standard ARM. Qualcomm has its own ARM core design team, Krewell pointed out.
Continue reading page 2 on Embedded's sister site, EE Times: "$35B qualcomm question: What next?."
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