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Showing posts for October 2016

31 October 2016

Qualcomm acquires NXP Semiconductors

After weeks of intense media speculation, Qualcomm’s acquisition of NXP Semiconductors has finally been formally approved by the boards of directors of both companies. Analysts believe that the transaction, valued in the region of $47bn, will aid Qualcomm expand into new industries and reduce its dependence on the smartphone market.

Qualcomm, the San Diego-based firm, have a strong market position in producing components for the smartphone market whilst NXP is the biggest supplier of chips that are used in the automotive industry.

In recent years, Qualcomm gained over half of its profits through the licencing of wireless patents to most the world’s leading smartphone manufacturers. However, the mobile market has slowed down, leading to fears over the company’s future revenue streams

By securing a prominent segment of the automotive sector, the acquisition will cement Qualcomm’s standing and lockdown revenue streams in an important, high-growth area for years to come.

The combined revenue of the two companies is predicted to exceed $30bn.

Speaking about the deal, Steve Mollenkopf, Qualcomm’s Chief Executive, said the following:

“With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry.

The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale.”

“By joining Qualcomm’s leading SoC capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT, we will be even better positioned to empower customers and consumers to realise all the benefits of the intelligently connected world.”

Mollenkopf’s counterpart at NXP, Rick Clemmer, stated that the acquisition would “bring together all technologies required to realise [NXP’s] vision of secure connections for the smarter world, combining advanced computing and ubiquitous connectivity with security and high-performance mixed-signal solutions.

“Jointly, we will be able to provide complete solutions which will allow us to further enhance our leadership positions, and expand the already strong partnerships with our broad customer base.”

The transaction is expected to be completed by the end of next year, subject to regulatory approval and other closing conditions.

28 October 2016

Samsung's Galaxy Note 7 Recall Could Impact Lead Times and Prices


Samsung’s unfortunate and embarrassing problems with the Galaxy Note 7 could impact the wider semiconductor and memory market, if recent reports are to be believed.

In a bid to secure revenue streams, the South Korean electronics giant is rumoured to be in the process of increasing display and memory component to offset the £2bn loss accrued by the rather public failure of its flagship handset.

In recent years, the semiconductor and component arm of Samsung has proved to be extremely profitable and has gradually become the backbone of the company’s financial success. In Samsung’s most recent quarterly earnings report it was disclosed that the semiconductor division made a profit of £2.65bn during the third quarter, which equates to 84% of Samsung’s overall operating profit during the three-month period.

In a statement released in conjunction with the financial report, Samsung admitted that for 2017 it would look to “improve earnings for the components businesses” and take advantage of a “solid market demand for high-performance and high-density products.”

This led, almost immediately, to speculation that a price rise for Samsung-branded electronic components would be just around the corner.

Unfortunately for buyers, it isn’t just Samsung-manufactured parts that are expected to increase in price in the coming months.

According to the market research firm TrendForce, the discontinuation of the Galaxy Note 7 is likely to impact the wider component market. Because of the Note 7’s public failings, rival smartphone manufacturers are ramping up production in a bid to capitalise on Samsung’s misfortune.

The cost for key smartphone components such as DRAM, NAND flash and AMOLED panels has been on the rise recently, due to existing supply shortages. However, with many of the world’s biggest manufacturers looking to increase their own production lines, demand is expected to skyrocket and disrupt what is a historically volatile market.

As an example, an article published by the electronics website DigiTimes suggests that in some instances lead times for certain memory components have doubled in response to this extra demand from smartphone manufacturers. Obviously, this is having a detrimental effect on those manufacturers in less lucrative sectors that are now seeing both lead times and cost increases.

With both manufacturer pricing and lead times predicted to rise in the short term, sending an enquiry through to Cyclops Electronics could save you time and money.

We have 177,232 line items in stock, from leading component and memory manufacturers such as Samsung, Fairchild and NXP, and has access to 14 million more lines, giving us the ability to offer extremely competitive pricing on hard-to-find and long lead time parts. And it is worth remember that we offer a 1 Year Quality Guarantee on all components and promise to be cheaper than standard franchised distribution pricing on all stocked items.

17 October 2016

Qualcomm in talks with NXP

The trend of acquisition and consolidation within the electronics industry shows no sign of abating.

According to numerous recent press reports, Qualcomm has started discussions with their counterparts at NXP Semiconductor regarding a merger that would be valued in the region of $30bn.

The Wall Street Journal has stated that the two parties could strike an agreement before the end of this year.

Once news of the potential deal broke, shares in the Dutch-based NXP jumped by 17%, giving the company a market value of $33bn.

The proposed deal would massive alter Qualcomm’s operational strategy and give them a dominant market position in the automotive sector.

At the moment, Qualcomm derives most of its revenue from designing and selling chips but the majority of the company’s profit comes from licencing its wireless patents to the world’s major mobile phone manufacturers. Through this split strategy, Qualcomm has grown to become one of the most well-known technology companies in the world but analysts believe that the American company is looking to diversify even more in order to secure additional revenue streams.

By purchasing NXP, it is believed that Qualcomm’s chip business would grow exponentially, making it the world’s leading provider of automotive chips. Given that driverless cars and wireless technology are key areas for the technology sector at the moment, the move would put Qualcomm in a prime position to be an industry leader for years – if not decades – to come.

Buyouts, mergers and acquisitions within the chip and semiconductor industries have exceeded $75bn this year whilst market experts believe that the sector’s total transactions come in well above the $450bn mark, making it one of the most financially attractive sectors in the global economy.

This news comes just a couple of months after Japan’s SoftBank agreed a deal to purchase the UK-based chip designer ARM Holdings for $32bn.

06 October 2016

ON Semiconductor Purchases Fairchild

Earlier this week, ON Semiconductor announced the formal completion of its purchase of Fairchild Semiconductor.

The $2.4 billion deal reinforces ON Semiconductor’s position within the wider semiconductor industry, particularly strengthening the Phoenix-based company’s presence in relation to the power transistors and diode markets.

In a statement, Keith Jackson, the President and CEO of ON Semiconductor, said that the acquisition of Fairchild “provides us a platform to aggressively expand our profitability in a highly fragmented industry. With the addition of Fairchild, our industry leading cost structure has further improved in a significant manner and we are now well positioned to generate substantial shareholder value as we integrate operations of the two companies.”

Analysts believe that the acquisition, like Renesas’ proposed buyout of Intersil, is, effectively, ‘a power management play’. 

As Stephan Orr writes, “It does a processor maker no good to build a 14mm device with 5 billion transistors on one chip — and send your customer elsewhere for solutions to the problems of powering it.”

Moving forwards, Fairchild will be a wholly owned subsidiary of ON Semiconductor.

This is not the first time that Fairchild has been purchased. Fairchild was initially founded in the late-1950s and would quickly become a pioneer in the engineering of integrated circuits before it was bought by Schlumberger Limited, who then sold it to National Semiconductor in 1987.

A decade later, Fairchild was reconstituted and spun off as an independent company.

Don’t forget that Cyclops Electronics has recently taken a large quantity of Fairchild stock. With an estimated value of $4m, this is one opportunity that you don’t want to miss. The delivery has bumped our stocked item list to a massive 177,232 lines, and with our price match guarantee, this surely makes Cyclops Electronics the number one place to go for all your component needs.

A complete Fairchild stock list is available to download via this link.

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