Ambarella reportedly in talks to be acquired by NXP Semiconductors, shares spike

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.

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.

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.

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.

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.

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.

Shares in NXPI are up 11% so far this year, giving the company a market capitalization of roughly $62 billion as of Friday.

Ambarella shares are trading over 17.5% higher following the announcement. NXP Semiconductors is trading 3.3% lower.

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