When chip maker NXP Semiconductors acquired Freescale last year, the goal was to create a combined company worth $40 billion and produce chips for cars, mobile devices, and a wide range of smart, connected devices.
Now rival Qualcomm has announced plans to acquire NXP for $47 billion.
To put things another way, the second largest chip maker is buying the fourth largest.
While NXP is the dominant player in automotive chips, Qualcomm’s bread and butter in recent years has revolved around smartphone processors. The merger would help Qualcomm diversify its product lineup at a time when smart vehicle systems still represent a growth opportunity, while smartphone growth seems to be tapering off.
It could also put Qualcomm in a better position to compete with Intel and other chip makers in the emerging Internet of Things space, which includes automotive systems, but also networking products, surveillance systems, wearables, and smart home products, among other things.
Qualcomm’s acquisition of NXP is expected to be complete by the end of 2017, assuming the deal is approved by regulators.