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$47B Deal Could Help Qualcomm Move From Phones To Cars

Photo credit: kelemenop / Flickr

The Qualcomm building in San Diego is pictured in this undated photo.

Qualcomm announced the largest deal in its history on Thursday. The San Diego company will acquire Dutch chipmaker NXP Semiconductors in a deal totaling $47 billion.

"This is a huge deal," said Linley Gwennap, a semiconductor industry analyst with The Linley Group.

"These are two big, very successful semiconductor companies that are combining forces in order to address a very broad range of new markets."

By purchasing NXP, Qualcomm buys itself a portfolio of chips that NXP has already successfully placed in cars and other Internet-connected devices. NXP also makes technology involved in mobile payment systems like Apple Pay.

Gwennap thinks the deal will help Qualcomm expand beyond the sluggish smartphone market and into growing fields like connected cars and the Internet of things.

"We're seeing very small growth in smartphone sales this year," he said. "So Qualcomm is seeking other opportunities to increase their revenue in the future."

Qualcomm expects the combined company to see annual revenues topping $30 billion.

Correction: A previous version of this story mistakenly referred to Linley Gwennap as an analyst with the Gwennap Group. The name of his firm is The Linley Group.

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