CEO Frans van Houten said the company plans to explore options for acquisitions with cash and credit reserves of more than 1.2bn euros ($1.5bn). He said that in 60% of its product range it is number one or two in the market and he is looking for ways to scale up the remaining 40%.
He said NXP wants to be a leader in everything it does. NXP already has number-one market share in areas such as TV chips, contactless identification for e-passports, RFID for electronic ticketing in public transport, car radio digital signal processors, and key mobile phone system solutions, he said.
Now that Infineon Technologies AG has spun out its memory business, NXP claims to be Europe’s second largest chip operation of STMicroelectronics NV and the eighth largest in the world.
Van Houten did not deny ambitions to move into the top five, not a huge ambition in a highly fragmented industry where analysts at iSuppli estimate that only Intel Corp, Samsung Electronics, and Texas Instruments can boast market share of more than 4%.
NXP, which operates in the five sectors of automotive, identification, home, mobile and personal, and multimarket semiconductors, had a share of only 2.4% in 2005 when revenue was $5.7bn.
The company outsources 20% of its production, and while van Houten said he believes in a mix of production from its own facilities and outsize fabricators, it is aiming to increase the outsourced share to 40% as part of the fab-lite approach that has become general in the industry.
NXT, which has a 37,000 workforce, is the product of a buyout that saw Kohlberg Kravis Roberts & Co, Bain Capital, Silver Lake Partners, Apax, and AlpInvest Partners NV invest in the operation, leaving Philips with a 19.9% holding.
The company’s name is derived from next experience. Put simply, we’re enabling the next generation of consumer entertainment products, said van Houten.
With the deal still to close, NXT’s exact legal status as a company is unclear though it will remain based in Eindhoven, the Netherlands.
