Smart Cars: ST Acquires Nxp's Business, Betting on Future Sensors

MILAN – ST Microelectronics is strengthening its presence in the automotive sector with the acquisition of the MEMS sensor business of NXP , a Dutch multinational semiconductor company. The price? $950 million in cash, of which $900 million is upfront and $50 million is contingent upon the achievement of agreed-upon technical milestones. This transaction will have a positive impact on production at the Agrate Brianza site in the province of Milan. The all-cash transaction will be financed with existing liquidity and is expected to accelerate St. Microelectronics' earnings per share. Markets welcomed the announcement, and the stock closed higher on the Milan Stock Exchange after a disappointing day.

The MEMS sensor portfolio to be acquired by ST consists primarily of automotive safety sensors , both passive (such as airbags) and active, vehicle dynamics control (such as stability), and sensors for monitoring engine management, comfort, and safety. It also includes pressure sensors and accelerometers for industrial applications. MEMS are tiny, complex devices that detect and analyze physical inputs such as motion, temperature, and sound. Unlike traditional chips, they include mechanical parts that move within the chip, as well as specialized integrated circuits that detect and process signals from the micromechanical components. They are everyday elements, found in objects such as smartphones.

“The MEMS activities of the Italian-French group and NXP – explain Marco Cassis, president of the Analog Power and Discrete, Mens and Sensors group at ST and Simone Ferri, general manager of the MEN'S subgroup at ST – are highly complementary in terms of product portfolio and technologies, and the combined product offerings of the two will be well balanced between the automotive, industrial and consumer electronics end markets ”.

In 2024, NXP's MEMS business generated revenues of approximately $300 million, with both gross margins and operating margins significantly accretive for ST, which boasts over 20 years of experience in the MEMS sector, starting with the first 3D motion sensors developed in 1993, initially focused on personal electronics such as desktop computers, smartphones, tablets, and gaming devices. ST's sensor technology now extends to automotive and industrial applications, with over 24 billion MEMS sensors sold. The goal is to create "even smarter sensors, thanks to the fusion of technologies and the integration of artificial intelligence," explain the two managers of the multinational controlled by the Italian and French governments.

"The businesses are highly complementary in terms of technology and product portfolio, with a well-balanced combined offering," the two pointed out in the call with journalists. "The automotive sector is a sector where it takes time to gain market share. The incumbents are very strong. Being able to now acquire one of the incumbents, which is a leader in passive safety and has a very strong position in vehicle dynamics, is an absolute major step forward for us ."