Qualcomm, the company already responsible for providing the majority of the world with its mobile processors and wireless modems, is endeavoring to make itself even more indispensable to our future with today’s announcement that it’s acquiring NXP Semiconductors for $47 billion. NXP is a Dutch outfit employing 45,000 people in 35 countries around the world, and would probably be more recognizable by its original name of Philips Semiconductors. Like Qualcomm, NXP has quietly played a major role in the shift of computing to mobile devices, providing secure wireless communication methods for things like contactless payments.
NXP’s business focus has been increasingly turning toward automotive and Internet of Things applications, and Qualcomm has already signaled its intent to grow beyond its traditional strength of smartphones into those new areas of growth. At a price of $47 billion, the American company is certainly paying a premium for powering up its ambitions, as NXP’s total market capitalization yesterday was $34 billion. But this consolidation may ultimately prove its worth for Qualcomm, which, like others, believes there are untold riches waiting to be untapped as the smart car and smart home start to mature into real-world products. With NXP under its umbrella, Qualcomm makes itself a practically inevitable partner for any company looking to build devices, cars, or other things connecting to the internet.
Much like Intel with desktop PCs and laptops over the past couple of decades, Qualcomm wants to be unavoidable and essential: the one chip provider that every manufacturer has to work with in some shape or fashion. Acquiring NXP may just be the ticket toward that destination.