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

ST has entered into a definitive agreement to acquire NXP's MEMS sensor business for up to $950 million (approximately 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, particularly in the automotive safety, industrial, and consumer applications sectors, and enhance its competitiveness in the global sensor market.

NXP's MEMS sensor business is expected to generate approximately $300 million in revenue in 2024, positively impacting ST's gross margin and operating profit. After the acquisition is completed, there is expected to be an immediate increase in 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 cooperation 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 gain highly skilled R&D personnel and core IP and technologies in the automotive safety field.

Leveraging ST's integrated device manufacturer (IDM) model, the company will encompass the entire MEMS process from design through manufacturing, testing, and packaging, shortening innovation cycles and increasing flexibility for customized designs.

“This acquisition is strategically important for ST and will enable us to better serve our customers,” said Marco Cassis, President of ST.

Jens Hinrichsen, NXP's vice president, also said, "This business aligns perfectly with ST's strategy, and we are delighted that the team will be able to build a long-term future at ST."