Four chipmakers heading to the altar are among companies likely to be in "the best position to win" the Internet of Things "revolution," a Wall Street analyst says.
NXP Semiconductors (NASDAQ:NXPI) and its pending merger partner Freescale Semiconductor (NYSE:FSL), along with Apple (NASDAQ:AAPL) supplier Avago (NASDAQ:AVGO) and its fiancee Broadcom (NASDAQ:BRCM), are among the semiconductor manufacturing beneficiaries as the industry races to connect more devices and other things to the Internet, wrote Needham analyst Rajvindra Gill in a preliminary report slated for release early next week.
NXP stock was up 4.5% in midday trading in the stock market today. Freescale stock was up nearly 4% midday Friday.
Shares of Avago and Broadcom were both up almost 1% midday Friday.
"Over the past 50 years, the semiconductor industry has benefited from three major technological revolutions: the era of computing, the era of communications and the era of mobility," wrote Gill in a preview of his 100-page report. "The Needham semiconductor research team believes the industry is now entering a fourth phase: wireless connectivity everywhere or Internet of Things (IoT).
"We believe nearly every industry will migrate to an IoT model, yielding 50 billion connected devices by 2020."
Earlier this week, the Federal Trade Commission said NXP could proceed with its $11.8 billion acquisition of Freescale if NXP sells its power amplifier business. That sale, to China-based Jianguang Asset Management, is in the works. European regulators ruled similarly two months earlier.
Meanwhile, Reuters reported that the European Commission approved Avago's $37 billion takeover of Broadcom on Wednesday, without conditions. In addition to supplying Apple, Avago is a major supplier of chips for Samsung smartphones and other mobile devices.
Avago is slated to release earnings Wednesday after the close, with analysts saying it is more exposed to the cyclical nature of Apple iPhone and Samsung Galaxy smartphone sales.
By Gary Shaw
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