STMicroelectronics (ST), a global semiconductor company, is acquiring NXP Semiconductors (NXP)’s MEMS sensor business, strengthening its automotive and industrial sensor portfolio, expanding its market, and improving profitability.

ST has entered into a definitive agreement to acquire NXP's MEMS sensor business for up to $950 million (KRW 1.31 trillion).

Of this, $900 million will be paid upfront, with an additional $50 million to be paid upon achievement of technical objectives.

This acquisition is seen as a strategic choice that significantly expands ST's MEMS sensor technology and product portfolio.

It is expected to strengthen ST's position, especially in the automotive safety, industrial, and consumer applications sectors, and increase its competitiveness in the global sensor market.

NXP's MEMS sensor business is expected to generate sales of approximately $300 million (KRW 410 billion) in 2024 and is expected to have a positive impact on ST's gross margin and operating profit. After the acquisition is completed, there is expected to be an immediate accretive effect on ST's earnings per share (EPS).

The product line being acquired by ST includes sensors for airbags and vehicle dynamics control, TPMS, engine management, security and convenience features, as well as industrial pressure and acceleration sensors.

Through this, ST plans to strengthen its collaboration with Tier 1 automakers in the rapidly growing MEMS automotive market and accelerate technological innovation in the fields of safety, electrification, automation, and connected cars.

Through this acquisition, ST will secure highly skilled R&D personnel and core IP and technologies in the automotive safety field.

ST's integrated device manufacturer (IDM) model will enable the company to cover the entire MEMS design process from manufacturing to testing and packaging, shortening innovation cycles and increasing flexibility for custom designs.

“This acquisition is a strategically important move for ST and will provide a foundation for us to better serve our customers,” said Marco Cassis, president of ST.

Jens Hinrichsen, NXP’s vice president, also said, “This business is a perfect fit with ST’s strategy and we are delighted to have the team build a long-term future at ST.”