The price of the company that makes chips for NXP Semiconductors has gone up after news of a possible buyout
At the auction on June 9, shares of the Chinese chip company NXP Semiconductors N.V. (NXPI) went up by more than 4% to $184.22. Investors liked what they heard about Samsung wanting to buy NXP Semiconductors, even though it wasn’t confirmed. This week, the Asia-Pacific press said that Samsung, a big company in South Korea, might want to buy NXP Semiconductors. The company is on a list of possible companies to buy along with Infineon and ARM Holdings.
It is important to note that there is no proof of this information and that the Chinese government has stopped other attempts to buy NXP Semiconductors. At the same time, Samsung has good reasons to be interested in NXP Semiconductors, a company that makes chips for the automotive industry. Every year, more and more microchips are added to cars as automakers add more functions for self-driving and helping the driver.
50 percent of NXP Semiconductors’ revenue came from the automotive industry last year. Another 22 percent came from the industrial industry and the Internet of Things industry. NXP Semiconductors predicts that these markets will grow by about 9–14% per year over the next three years. Samsung is also interested because NXP Semiconductors is a big customer of Taiwan Semiconductor Manufacturing, a company that competes with Samsung in the business of making semiconductors.
Given how busy companies that make semiconductors are and how much demand there is for them around the world, Samsung may want to strengthen its position in this growing market. The news of a possible deal has led to short-term growth, but NXP Semiconductors’ current projects and growth opportunities in the market are much more important for its long-term prospects.
