Investing.com — NXP Semiconductors is in discussions to acquire Ambarella, a chip designer focused on AI-enabled chips for camera technology in self-driving cars, the Financial Times reported on Friday. <\/p>\n
The talks between the two companies are ongoing, though a transaction is not certain, the report said. Other buyers could emerge or the discussions could fall through entirely. <\/p>\n
Ambarella, based in San Francisco, has a market value of about $3.3 billion as of Friday. The company designs chips for edge AI applications, where models run directly on devices rather than through the cloud. <\/p>\n
The potential acquisition would strengthen NXP’s automotive chip business, which is expected to represent roughly half of the company’s $15.1 billion in revenue this year. Ambarella produces image-processing semiconductors used in security cameras and self-driving car systems. <\/p>\n
The deal would come during a period of consolidation in the semiconductor industry as chip suppliers prepare for the AI revolution. Texas Instruments agreed to buy Silicon Labs for $7.5 billion earlier this year, while SoftBank acquired Ampere Computing for $6.5 billion last year. <\/p>\n
NXP, based in the Netherlands, has largely avoided large acquisitions in recent years. The company agreed to sell itself to Qualcomm for $47 billion in 2016, but the deal collapsed two years later after failing to obtain Chinese regulatory approval. <\/p>\n
Shares in NXPI are up 11% so far this year, giving the company a market capitalization of roughly $62 billion as of Friday. <\/p>\n
Ambarella shares are trading over 17.5% higher following the announcement. NXP Semiconductors is trading 3.3% lower. <\/p>\n
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