The auto chip leader based in the Netherlands. $NXP Semiconductors (NXPI.US)$ On Tuesday local time, it was announced that a deal has been agreed to acquire the Austria-based TTTech Auto, which focuses on automotive software technology, for $0.625 billion, significantly enhancing its Automotive Business, especially NXP Semiconductors' automotive software and hardware ecosystem.

NXP is the largest automotive chip manufacturer in the world, while TTTech Auto focuses on producing safety software-centric middleware—an intermediary type of Software that helps fully integrate automotive Hardware platforms, Automotive operating systems, and applications, as well as facilitate significant updates to software while ensuring that critical functions remain unaffected.

Following the announcement of NXP's acquisition of TTTech Auto, there are market views suggesting that by acquiring TTTech Auto, NXP not only enhances its capabilities in the field of automotive software but also accelerates the implementation of NXP's integrated Auto Hardware and Software global strategy, aimed at responding to the upcoming rebound trend in automotive chip demand and the future development trends of 'Electric Vehicles + AI Autonomous Driving' as well as Software-defined autos, thereby improving its competitiveness in the Global automotive chip and integrated auto Software and Hardware markets.

NXP executive Jens Hinrichsen stated in an official statement: 'This acquisition combines NXP's Automotive Hardware portfolio with the world-leading safety software solution providers.'

NXP's statement also indicated that this acquisition aims to strengthen its product portfolio, as major clients such as global auto manufacturers are increasingly inclined to view the perfect integration of Software and Hardware ecosystems (rather than just hardware products) as a key factor in determining vehicle design and overall performance.

NXP's General Manager for automotive embedded systems, Hinrichsen, stated that this acquisition will help the company become a global leader in automotive intelligent edge systems.

TTTech Auto specializes in focusing on critical software middleware related to safety and its integration with real-time operating systems. For NXP Semiconductors, combining its automotive-grade core processors, MCUs, and automotive-grade analog chips can create a more comprehensive automotive domain controller system or central computing platform solution.

By combining the hardware advantages of NXP's automotive chips with TTTech Auto's middleware solutions, NXP will be able to secure a more advantageous position in the intelligent edge system field, competing with strong rivals in the automotive chip sector such as STMicroelectronics, NVIDIA, and Qualcomm, offering more integrated and intelligent integrated software and hardware automotive solutions.

If this all-cash Trade receives formal approval from European regulatory authorities, TTTech, headquartered in Vienna, along with its management and 1,100 employees, will collectively join NXP's automotive business unit.

According to the latest forecast from the World Semiconductor Trade Statistics (WSTS), the global automotive chip market, which has faced sluggish demand since 2022, is expected to welcome the long-awaited 'recovery moment' in 2025. The WSTS significantly raised its forecast for the semiconductor market size for 2024 and 2025 in the latest autumn forecast compared to the spring forecast, expecting a 19.0% year-on-year growth in the global semiconductor market to reach 627 billion dollars in 2024. The WSTS expects the semiconductor market size in 2025 to grow from 2024, indicating that the global semiconductor market may experience an additional growth of approximately 11.2% on top of the already robust recovery trend in 2024, with the global market size anticipated to reach around 697 billion dollars.

WSTS predicts that the growth of the semiconductor market size in 2025 will be primarily driven by the storage chip category and AI logic chip category, while also anticipating that the growth rates of all other sub-chip markets, including discrete devices, optoelectronics, Sensors, MCUs, and analog chips, will reach single-digit increases.

According to WSTS's expectations, demand for analog chips, which hold a significant share of the chips needed in Autos, especially electric vehicles (EVs), is expected to slowly enter a recovery cycle in 2025 after two consecutive years of sluggish demand, while another important chip category necessary for electric vehicles—MCUs—is anticipated to recover at a stronger pace based on a slowly recovering basis in 2024. Analog chips play an indispensable role in various key functional modules and systems of electric vehicles, including power management, Battery management, sensor interfaces, audio and video processing, and motor core Control System.

Editor/lambor