Qualcomm could still consider re-opening NXP bid despite ruling it out, says Taipei-based tech analyst

American chip maker Qualcomm could reconsider acquiring rival Dutch semiconductor maker NXP after China said they were open to approving the previously blocked deal at a meeting between the US and China at the G20 summit in Argentina, even though the US company has denied the possibility for now, said a Taipei-based analyst on Monday.

Buying NXP, which specialises in computer chips for carmakers, would enable Qualcomm to diversify growth engines at a time of weak demand for smartphones and lacklustre results, said C.Y. Yao, a Taipei-based senior analyst with research agency TrendForce. The US company is the world’s biggest supplier of mobile chipsets for Android phone brands.

“2019 will not be easy for Qualcomm as smartphone sales are expected to be subdued. Restarting the acquisition of NXP will help Qualcomm effectively disperse future operational risks without betting fully on smartphones,” said Yao, adding that he believes the restart of the NXP deal should still be under consideration at Qualcomm despite its assertion the deal had been terminated as the deadline had expired.

Qualcomm on Monday rejected a suggestion by the White House that its collapsed US$44 billion acquisition of Dutch peer NXP Semiconductors could be revived, after the White House said that China was “open to approving the previously unapproved” deal “should it again be presented”.

Qualcomm walked away in July from the proposed acquisition of NXP after failing to secure Chinese regulatory approval, becoming one of the most high-profile victims of the escalating US-China trade war at the time.

NXP is the world’s largest chip supplier to the automotive industry and unlike smartphone markets – which have become mostly saturated in the US, China, and western Europe – autonomous driving remains an area of rapid growth with bags of future potential as AI technologies are rolled out.