STMicroelectronics acquires NXP’s sensor business

European chip giant STMicroelectronics (ST) recently announced it will acquire NXP’s MEMS sensor business for $950 million in cash. This business, which includes automotive safety sensors (such as airbag control and tire pressure monitoring) and industrial-grade pressure sensors, generates approximately $300 million in annual revenue.

According to the financial report released simultaneously with the acquisition, STMicroelectronics reported its first quarterly loss in a decade in the second quarter of 2025, with a net loss of $97 million. This loss was primarily due to $190 million in restructuring charges, and the company’s revenue in the first half of the year plummeted 21% year-on-year.

Despite facing short-term financial pressure, STMicroelectronics is choosing a counter-cyclical approach to bet on the future market. This acquisition will significantly strengthen its position in the automotive and industrial sensor markets, which offer significant growth potential.

The two companies have a low customer overlap (less than 20%), with NXP having a significant advantage in the European and American automotive supply chains, while STMicroelectronics has a deep presence in the Asian industrial market. Following the acquisition, STMicroelectronics’ share of the MEMS sensor market is expected to increase from 12% to 18%, further narrowing the gap with Bosch and TDK.

The global MEMS market is projected to exceed $18 billion in 2025, with automotive and industrial applications dominating. The company expects third-quarter revenue to increase by 14.6% quarter-over-quarter to $3.17 billion, with industrial orders showing signs of recovery.

The company’s president stated that ST will continue to focus on customer support, new product launches, and manufacturing layout adjustments. Analysts are optimistic about the long-term integration value and believe that the acquisition aligns with the company’s strategic roadmap.