Qualcomm Could Re-open Negotiations with NXP, says a Senior Analyst

by Andrew 0

Popular US-based mobile chip maker Qualcomm could still reconsider a move to buy NXP after Chinese President Xi Jinping’s statement at the G20 Summit that the matter could be revisited, suggests an analyst for TrendForce based out of Taipei. Qualcomm gave up all hopes for the deal recently when China blocked the move amidst escalating tensions between the US-China Trade war back in July this year. The saga started back in October 2016 when Qualcomm made a successful $38 billion bid for the semiconductor maker. However, in the months that followed, unforeseen issues such as shareholder backing arose prolonging the deal to be completed successfully. In July 2018, the deal finally fell apart when China disapproved the deal. Since Qualcomm has significant ties with Chinese OEMs, the chip maker had no choice but to agree with China’s decision.

Qualcomm Snapdragon 855
Qualcomm chip with logo

Now, Yao, senior analyst at TrendForce says that Qualcomm could be forced to reconsider the move even after backing out because of unimpressive mobile chip sales this year. Most big smartphone markets like the US, China, and India are almost fully saturated and the world number one chip maker will be forced to look into new avenues for the coming decade. Unlike smartphones, the automotive chip industry has a huge amount of untapped potential. With NXP being the biggest supplier to the industry, Qualcomm could be forced to reopen the deal amidst a grim outlook for the mobile chip industry in the coming months.

A recent study by Allied Market Research forecasted the autonomous vehicle industry could grow to US$54.23 billion by 2019 and potentially to US$556.67 billion by 2026 with a 40 percent compound annual growth rate. On the other hand, the global smartphone shipments shrunk by 6 percent Y-o-Y in the Q3, 2018.