ST Micro snaps up NXP

FRANCE'S ST Microelectronics is to take over the wireless arm of Dutch chip producer NXP, to form what the company claims will become the world's third largest maker of wireless chips.

The original plan – as revealed by the INQ – was to include Infineon in the merger, too but that hasn't happened yet.

According to the pair, based on figures from Isuppli, together they would have 14 per cent of the market while Texas Instruments has around 16 per cent and Qualcomm comes top with about 18 per cent.

Significantly, three of the top five mobile phone makers – Nokia, Samsung and Sony Ericsson, would become customers of the combined company.

Nokia has welcomed the news, but then it would wouldn't it considering when it pulled the plug on its own chip business and licensed existing technology to ST Micro?

Analysts are hinting that the big handset vendors are looking to simplify their supply chains.

Francis Sideco, an analyst with Isuppli, has been quoted as saying, "There's probably space for maybe four or five big guys in this space, and at last count we were closer to twelve."

The news leaves some of the industry's specialist suppliers – like Blighty's own Bluetooth specialist, CSR, looking a tad exposed.

A CSR spokeswoman told the INQ that the company would get back to us. µ

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Single European chip company idea floated