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Despite STMicroelectronics' announcement last week of its plan to acquire NXP Semiconductor's MEMS sensor business for $950 million, the company reported a loss of $177 million in the second quarter due to restructuring costs, with revenue down 21% year-on-year in the first half of the year, sparking ongoing industry attention.

Let's briefly review the details of the transaction. Under the agreement with NXP, STMicroelectronics will pay $9 billion plus an additional $50 million in incentives, aiming to boost its underperforming analog, MEMS, and sensor divisions. The transaction is expected to be completed by the first half of 2026.

The transaction primarily involves automotive safety sensors, including passive (airbag) and active (vehicle dynamics) sensors, as well as monitoring sensors (tyre pressure monitoring systems, engine management, convenience, and safety sensors). Additionally, it includes pressure sensors and accelerometers for industrial applications.

‘NXP is a leading supplier of automotive MEMS motion and pressure sensors and has long been favoured by customers. However, after a thorough product portfolio assessment, the company believes that this business does not align with its long-term strategic direction,’ said Jens Hinrichsen, Executive Vice President and General Manager of NXP's Analog and Automotive Embedded Systems division. Both parties agree that this product line is a good fit for STMicroelectronics' product portfolio, manufacturing footprint, and strategic roadmap.

Market data indicates that MEMS inertial sensors in the automotive sector are expected to grow faster than the broader MEMS market, with the acquired NXP business generating $300 million in revenue in 2024.