NXP, Freescale: Bigger Not Better

Duo leads relatively small automotive segment

Rick Merritt, EETimes
3/2/2015 10:08 AM EST

SAN JOSE, Calif. — The proposed merger of NXP and Freescale creates a big company but not a substantially different one. With the exception of its size, the combined giant will have few new tools to ensure its survival in a consolidating chip industry.

Assuming the deal closes as expected before the end of the year, executives are confident they can shave $200 million off annual 2016 costs largely from administrative overlap and expanded buying power. The savings could expand to a maximum $500 million/year at some undetermined point in the future, executives said. However, they are not prepared yet to set any targets for accelerating growth in revenues or profits.

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