NXP Semiconductors is reportedly in talks to buy Ambarella, a fellow vehicle chip maker, in what would be one of the biggest automotive silicon deals in years. The Financial Times cited sources saying other industry players could also make bids for the Santa Clara, California company, which had a market capitalization of about $3.25 billion before the acquisition rumors pushed its shares up 16%.
Netherlands-based NXP is among the world’s largest suppliers of car chips. Its processors appear in infotainment systems, autonomous driving hardware and a range of other auto parts, and the company also sells into the data center market. Ambarella competes in many of the same segments, most notably with chips that let carmakers run AI software inside vehicles.
Ambarella’s newest auto chip, the CV7, pairs a four-core CPU with an image signal processor and video encoder. It also packs an AI accelerator that the company says delivers five times better power efficiency than competing designs and can run transformer-based language models. A more advanced processor, the CV3-AD685, equips vehicles with L4 autonomy and ships with radar software called Oculii that cuts the number of antennas needed while boosting mapping resolution.
A deal would help NXP strengthen its position in the autonomous vehicle market at a moment when Waymo, Amazon’s Zoox unit and other players are expanding self-driving taxi fleets. Ambarella’s chips are also used in industrial robots and more than half a dozen other segments.
Neither company has confirmed the talks, and no price has been reported. If the acquisition goes through, it would extend a wave of consolidation in automotive semiconductors as demand for AI-enabled driving features keeps climbing.
