Chip giant Qualcomm is reportedly in talks to consolidate it’s position in the market via the acquisition of Netherlands-based NXP Semiconductors.
According to a Thursday report in the Wall Street Journal, an agreement could be reached in the next few months. The deal would likely cost upwards of $30 billion, the report said, adding to the $75 billion in total chip deals that have already taken place this year.
KPMG LLP partner Lincoln Clark told the Wall Street Journal acquisitions like the one reportedly being considered represent an easier way for companies to expand their product portfolios without throwing money away on chips that don’t take off in the market. A broader portfolio in turn allows chip makers to become more valuable suppliers for big customers, ensuring they aren’t pushed out by rivals, the Journal said.
The move would come amid a tough climate for Qualcomm that consists of a slowdown in the smartphone market and it’s recent loss of some business from Apple when the smartphone giant decided to use Intel chips in some of its handsets.
Though the deal would come with “considerable” risks in integration and execution, Sanford C. Bernstein analysts have said the acquisition could add 30 percent to Qualcomm’s earnings even before any cost savings.
NXP shares were up nearly seven percent on Friday on the news. Qualcomm shares were up just over three percent.
