I think I might be psychic.
Yesterday, while I was editing a few of the pages on this site about Freescale's series of Freedom boards, and looking for info about Freescale’s history and management, I received an email from them about their proposed merger with NXP, which I didn’t see until today.
I had found an interesting Bloomberg piece – “When a buyout goes bad” – that really got me thinking. Maybe Freescale was lucky to still be in business! How could it be that one of the companies that was a core innovator in the early days of microprocessors could have such a tenuous future?
I was also surprised about the current management. Many of them had joined the company within the last five years; some even more recently. And we’re talking about the top management here. Could the company’s culture survive?
While I was, for the first time, pondering the future of the company, they emailed me the bizarre, almost shocking, news: Freescale and NXP... Merging?
It would make more sense for Freescale to merge with TI. They are both Texas companies; it’s hard to imagine “efficiencies of scale” between NXP – in the Netherlands – and Freescale, in Texas. TI’s ARM processor portfolio really does complement Freescale’s: TI needs to drop their buggy Tiva (né Stellaris) parts, which they obtained thru the purchase of Luminary Micro, and Freescale’s Kinetis would be a perfect slot-in. Also TI’s OMAP and Freescale’s i.MX parts – both ARM-based “application” processors – could possibly share engineering efforts, if the two were combined.
And the email seems misleading, at best. Here is a particularly juicy bit:
The two companies’ portfolios overlap primarily in only one area, RF power products. In this case, NXP has decided to sell their RF power portfolio and keep the industry-leading Freescale RF portfolio. All other product families are expected to complement each other very nicely. For instance, the Freescale Kinetis MCU combination with NXP’s leadership in connectivity and security is an easy and obvious fit.
This totally overlooks the fact that Freescale’s HC08 and S08 8-bit mixed-signal processor families are direct competitors of NXP’s 8051-based LPC processors, and that Freescale’s ARM-based Kinetis processors – a family they have grown aggressively in the last few years – are direct competitors to NXP’s ARM portfolio, which they started when they were still a part of Philips!
Claiming no overlap in their microcontroller portfolios – the only part of both companies’ offerings that I am pretty familiar with – seems more than a bit disingenuous. Are we calming investors here? What are the engineering customers of both companies to think of this?
Claiming “little overlap” of product lines seems much truer of TI and Freescale, than of NXP and Freescale.
I’m a huge fan of Freescale. I went thru a long process of elimination a few years back to find an 8-bit microprocessor family I could really get behind. After flirting with Atmel’s AVR and Microchip’s PIC, and shuddering at the idea of trying NXP’s 8051-based chips, I settled on Freescale’s S08 series, and totally fell in love. These are great chips! And totally unloved in the hobbyist and experimentor world. I wanted to do my part to make them usable and fun, and put a ton of work (still sadly unfinished) into my muforth project to support them.
Now I wonder what their future really is.
Freescale is being merged into NXP. This isn’t two companies joining forces and becoming a new, third company. This is Freescale being absorbed. I can’t see this as anything but a failure of sorts. The upbeat emails and press releases, putting a bright face on rather dire – even sad – news, make it rather surreal.
We really do live in Extremistan.