UPDATE 7/25/18: The US's ongoing trade war with China has forced Qualcomm to call off its plan to buy NXP Semiconductors.

"Pending any new material development, we intend to terminate our agreement to acquire NXP at the end of the day," Qualcomm CEO Steve Mollenkopf said during an earnings call on Wednesday.

Qualcomm's CEO said the "current geopolitical environment" had effectively blocked the proposed merger. The deal has so far failed to secure approval from a key Chinese regulator, forcing the proposed merger to stall.

"Continued uncertainty overhanging such a large acquisition introduces heightened risk," he said. "We weighed that risk against the likelihood in a change in the current geopolitical environment, which we didn't believe to be a high probability outcome in the near future."

Nevertheless, the outcome is a blow for Qualcomm, which wanted to use NXP's technologies to accelerate its expansion into cars and mobile payments. To sustain growth, the US company will have to focus on squeezing more revenue from the coming 5G deployment and from smartphone demand in foreign markets.

Qualcomm has agreed to pay $2 billion to NXP as a termination fee.

Original story:
Qualcomm on Thursday announced plans to acquire NXP Semiconductors for $47 billion.

Recommended by Our Editors

The Best Budget CPUs for 2026

Google Confirms Googlebooks Won't Be Limited to Intel Chips

Intel Reportedly Planning 4 New CPU Lines Through 2028: Here's What to Expect

NXP is a leading semiconductor solutions supplier for the automotive industry, and is helping to make self-driving cars a reality. The company has some 25,000 customers, and its products are in 14 of the top 15 automotive infotainment systems, according to the announcement. Qualcomm primarily makes chips for mobile devices like smartphones.

"The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale," Qualcomm CEO Steve Mollenkopf said in a statement. "By joining Qualcomm's leading SoC capabilities and technology roadmap with NXP's leading industry sales channels and positions in automotive, security and IoT, we will be even better positioned to empower customers and consumers to realize all the benefits of the intelligently connected world."

Qualcomm expects the companies together will generate annual revenues of more than $30 billion.

In a statement, NXP CEO Rick Clemmer said the combined company will bring together "advanced computing and ubiquitous connectivity with security and high performance mixed-signal solutions including microcontrollers.

"Jointly we will be able to provide more complete solutions which will allow us to further enhance our leadership positions, and expand the already strong partnerships with our broad customer base, especially in automotive, consumer and industrial IoT and device level security," he added.

NXP, meanwhile, in May said "four of the top five largest carmakers in the world" are using its BlueBox engine for their autonomous vehicle efforts. BlueBox combines NXP's S32V automotive vision processor and its LS2088A embedded compute processor for a platform designed to help carmakers build autonomous vehicles. NXP wants its technology in autonomous cars by 2020, when the first self-driving cars are expected to hit the road.