The automotive market in recent months has been a challenging venue for some chipmakers as they dealt with lingering higher-than-expected inventories, but NXP Semiconductors continued to aggressively invest in the sector, encouraged by a quarterly sequential increase in its automotive revenue toward the end of 2024.
The Dutch company closed out last year by acquiring Aviva Links, a San Jose, California-based in-vehicle connectivity firm, for $242.5 million in cash, and it started 2025 by announcing an agreement under which it will spend another $625 million in case to acquire TTTech Auto, an automotive software company in Vienna, Austria.
In less than a month, NXP has increased its automotive bet by almost $870 million, moves that come as research firm TrendForce recently observed that the “automotive chip market is emerging from the cold,” with encouraging signs that include “noticeable progress in inventory reduction for automotive chips.”
As for the TTTech deal, the acquisition will increase NXP’s assets in safety-critical software and middleware for software-defined vehicles (SDVs) as NXP eyes and SDV market SDV market that is anticipated to expand to 45% penetration of global auto production in 2027, reflecting a 48% CAGR between 2024 and 2027, figures which NXP attributed to the S&P March 2024 "automotive-ecu-market-database.”
The acquisition also brings in established business relationships with many automotive OEMs. NXP said in a statement that it expects that, pending regulatory approvals, TTTech Auto’s management team, intellectual property, assets, and approximately 1,100 engineering staff will join NXPs automotive team.
These assets and expertise should drive future advancements in NXP’s CoreRide open SDV platform, which the company announced almost one year ago and for which TTTech Auto was an early partner and supporter via its MotionWise middleware platform
Jens Hinrichsen, executive vice president and general manager of analog & automotive embedded systems at NXP Semiconductors, stated, "This acquisition combines NXP’s automotive portfolio with a leading global player in safety software solutions. The inclusion of TTTech Auto’s software into the NXP CoreRide solution further strengthens NXP’s automotive value proposition and accelerates the automotive industry’s transformation to software-defined vehicles… Our acquisition of TTTech Auto is the next big step in NXP’s journey to become the leading provider of intelligent edge systems in automotive and Industrial IoT."
TTTech Auto CEO Dirk Linzmeier added, "The emergence of intricately connected and adaptive frameworks in SDVs highlights the need for middleware to tackle challenges in integration, safety and scalability. NXP and TTTech Auto both clearly recognize this need and share the same vision for SDV transformation. Together, MotionWise and NXP CoreRide empowers automakers with a robust SDV foundation, ensuring seamless coordination of diverse systems that help automakers deliver innovative features while maintaining reliability and safety at scale."
NXP’s latest acquisition announcement also came the same week that the firm made a big splash at CES 2025 in Las Vegas with industrial and IoT news that included the unveiling of NXP’s MCX L14x and MCX L25x ultra-low-power microcontrollers (MCUs), which the company claims can deliver 3x less power consumption than previous MCX devices, boosting sensor viability by enabling efficient always-on data collection and reporting for battery-limited application, and extending the battery life of industrial and IoT devices like smart meters, sensor nodes for temperature and gas detection, and residential battery-constrained applications (air quality, motion and light sensors; fire & smoke and water leakage detectors).
Also at CES, NXP announced an expanded partnership with Honeywell that the company said “will accelerate aviation product development and chart the path for autonomous flight.” The partners said that Vertical Aerospace, an enabler of electric vertical take-off and landing aircraft (eVTOL) aircraft, already is test aircraft that use the Honeywell Anthem aviation platform, a “cloud-connected cockpit system” that involves embedded NXP application processors.