Continuing the considerable consolidation in the mobile-IC supply chain, Freescale Semiconductor announced a planned exit from the cellular-handset-chip-set market. The company in October said that it is exploring its options for the business, including the unit’s sale or the formation of a joint venture, just weeks after STMicroelectronics announced it would buy out NXP’s share of its ST-NXP Wireless joint venture. That August-launched company effectively saw NXP end its mobile-IC work. ST then merged in EMP (Ericsson Mobile Platforms), creating a formidable competitor to the wireless industry’s mobile-semiconductor kingpins, including Qualcomm.

Analysts believe that, with Freescale’s move, more opportunity could open to Qualcomm, however. As part of its action, Freescale updated its mobile-IC arrangement with Motorola whereby Motorola agreed to provide certain consideration in exchange for eliminating Freescale’s remaining minimum-purchase commitments.

“In recent reports, we have highlighted the theme of [Qualcomm’s] benefiting from rapid consolidation of the wireless-semi industry,” wrote Tim Luke, a semiconductor-market analyst at Barclays Capital, in a research note.

Freescale is seeking to increase its investments in the automotive and networking markets, as well as in the industrial and consumer markets. “In the cellular-handset-chip-set market, it has become evident that this business needs considerably greater scale … to achieve a position of market leadership and long-term success,” says Rich Beyer (photo), Freescale’s chief executive officer. Freescale’s cellular-handset-products business includes baseband processors, RF transceivers, power management/audio, software, and platforms.