NXP Semiconductors N.V.; Analysis To Aid Public Comment, 76288-76291 [2015-30894]

Download as PDF 76288 Federal Register / Vol. 80, No. 235 / Tuesday, December 8, 2015 / Notices GST Trust and William H. Hingst Living Trust; Robert F. Hingst and Mary M. Hingst, Co Trustees of Mary M. Hingst Living Trust; Mary M. Hingst Living Trust; John C. Hingst; Katherine H. Hingst, all of Kokomo, Indiana; Theodore J. Hingst, Trustee of Theodore J. Hingst GST Trust and Trustee of Ted Hingst Living Trust; Theodore J. Hingst GST Trust and Ted Hingst Living Trust, all of Lafayette, Indiana, as a group acting in concert; to retain voting shares of Community First Financial Corporation, and thereby indirectly acquire voting shares of Community First Bank of Indiana, both in Kokomo, Indiana. C. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480–0291: 1. Austin D. McLaen and Matthew S. McLaen, both of Forman, North Dakota, both to remain members of the McLaen family shareholder group, and retain voting shares of Sargent Bankshares, Inc., and thereby indirectly retain voting shares of Sargent County Bank, both in Forman, North Dakota. Board of Governors of the Federal Reserve System, December 3, 2015. Michael J. Lewandowski, Associate Secretary of the Board. [FR Doc. 2015–30870 Filed 12–7–15; 8:45 am] Board of Governors of the Federal Reserve System, December 3, 2015. Michael J. Lewandowski, Associate Secretary of the Board. BILLING CODE 6210–01–P FEDERAL RESERVE SYSTEM [FR Doc. 2015–30871 Filed 12–7–15; 8:45 am] Lhorne on DSK9F6TC42PROD with NOTICES Formations of, Acquisitions by, and Mergers of Bank Holding Companies BILLING CODE 6210–01–P The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) (BHC Act), Regulation Y (12 CFR part 225), and all other applicable statutes and regulations to become a bank holding company and/or to acquire the assets or the ownership of, control of, or the power to vote shares of a bank or bank holding company and all of the banks and nonbanking companies owned by the bank holding company, including the companies listed below. The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also VerDate Sep<11>2014 14:17 Dec 07, 2015 Jkt 238001 includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than January 4, 2016. A. Federal Reserve Bank of St. Louis (Yvonne Sparks, Community Development Officer) P.O. Box 442, St. Louis, Missouri 63166–2034: 1. First United Bancorp, Inc., Madisonville, Kentucky; to merge with Town & Country Financial, Inc., and thereby indirectly acquire Bank of Ohio County, both in Beaver Dam, Kentucky. B. Federal Reserve Bank of Dallas (Robert L. Triplett III, Senior Vice President) 2200 North Pearl Street, Dallas, Texas 75201–2272: 1. BankCap Equity Fund LLC, BankCap Partners GP L.P., and BankCap Partners Fund I, L.P., both in Dallas, Texas; to acquire through BankCap Partners Opportunity Fund, L.P., Dallas, Texas, up to 23.2 percent of the voting shares of Vista Bancshares, Inc., and thereby indirectly acquire Vista Bank, both in Ralls, Texas. FEDERAL RETIREMENT THRIFT INVESTMENT BOARD Sunshine Act; Notice of Meeting 10:00 a.m. (Eastern Time) December 14, 2015 (Telephonic). PLACE: 10th Floor Board Meeting Room, 77 K Street NE., Washington, DC 20002. STATUS: Parts will be open to the public and parts will be closed to the public. MATTERS TO BE CONSIDERED: TIME AND DATE: Open to the Public 1. Approval of the Minutes for the November 25, 2015 Board Member Meeting 2. Monthly Reports (a) Monthly Participant Activity Report (b) Monthly Investment Performance Report (c) Legislative Report 3. Quarterly Metrics Report 4. OGC Report and Annual Presentation PO 00000 Frm 00029 Fmt 4703 Sfmt 4703 Closed to the Public 5. Security FOR FURTHER INFORMATION CONTACT: Kimberly Weaver, Director, Office of External Affairs, (202) 942–1640. Dated: December 4, 2015. Megan Grumbine, Deputy General Counsel, Federal Retirement Thrift Investment Board. [FR Doc. 2015–31031 Filed 12–4–15; 4:15 pm] BILLING CODE 6760–01–P FEDERAL TRADE COMMISSION [File No. 151 0090] NXP Semiconductors N.V.; Analysis To Aid Public Comment Federal Trade Commission. Proposed consent agreement. AGENCY: ACTION: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order— embodied in the consent agreement— that would settle these allegations. DATES: Comments must be received on or before December 28, 2015. ADDRESSES: Interested parties may file a comment at https:// ftcpublic.commentworks.com/ftc/ nxpsemiconductorsconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ‘‘NXP Semiconductors N.V.—Consent Agreement; File No.151– 0090’’ on your comment and file your comment online at https:// ftcpublic.commentworks.com/ftc/ nxpsemiconductorsconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘NXP Semiconductors N.V.—Consent Agreement; File No.151– 0090’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Meredith Levert (202–326–2881), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580. SUMMARY: E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 80, No. 235 / Tuesday, December 8, 2015 / Notices Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent orders to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for November 25, 2015), on the World Wide Web, at http:// www.ftc.gov/os/actions.shtm. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before December 28, 2015. Write ‘‘NXP Semiconductors N.V.—Consent Agreement; File No.151–0090’’ on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/ publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals’ home contact information from comments before placing them on the Commission Web site. Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone’s Social Security number, date of birth, driver’s license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any ‘‘[t]rade secret or any commercial or financial information which . . . is privileged or confidential,’’ as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and Lhorne on DSK9F6TC42PROD with NOTICES SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 14:17 Dec 07, 2015 Jkt 238001 you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).1 Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https:// ftcpublic.commentworks.com/ftc/ nxpsemiconductorsconsent by following the instructions on the web-based form. If this Notice appears at http:// www.regulations.gov/#!home, you also may file a comment through that Web site. If you file your comment on paper, write ‘‘NXP Semiconductors N.V.— Consent Agreement; File No.151–0090’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC– 5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service. Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before December 28, 2015. You can find more information, including routine uses permitted by the Privacy Act, in the Commission’s privacy policy, at http://www.ftc.gov/ftc/privacy.htm. Analysis of Agreement Containing Consent Orders To Aid Public Comment The Federal Trade Commission (‘‘Commission’’) has accepted from NXP Semiconductors N.V. (‘‘NXP’’), subject to final approval, an Agreement Containing Consent Orders (‘‘Consent Agreement’’) designed to remedy the 1 In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c), 16 CFR 4.9(c). PO 00000 Frm 00030 Fmt 4703 Sfmt 4703 76289 anticompetitive effects resulting from NXP’s proposed acquisition of Freescale Semiconductor Ltd. (‘‘Freescale’’). On March 1, 2015, NXP and Freescale executed an Agreement and Plan of Merger (‘‘Merger Agreement’’) pursuant to which NXP will acquire all of Freescale’s common stock in a transaction valued at approximately $11.8 billion (‘‘Acquisition’’). The proposed Acquisition would combine the two largest suppliers of RF power amplifiers. The Commission’s Complaint alleges that the proposed Acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45, by substantially lessening competition in the worldwide market for RF power amplifiers. Under the terms of the proposed Decision and Order (‘‘Order’’) contained in the Consent Agreement, NXP is required, no later than ten days from the close of the NXP/Freescale transaction, to divest its RF power amplifier assets to Jianguang Asset Management Co., Ltd. (‘‘JAC’’). The divestiture package includes a manufacturing facility, manufacturing equipment, intellectual property, and customer and supplier contracts. NXP’s RF power employees, including the leadership of the business, will also transfer to JAC. The Consent Agreement provides JAC with everything needed to compete effectively in the RF power amplifier market. The Consent Agreement has been placed on the public record for 30 days to solicit comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will again review the Consent Agreement and the comments received, and decide whether it should withdraw from the Consent Agreement, modify it, or make it final. The Parties Headquartered in the Netherlands, NXP is a semiconductor developer and manufacturer specializing in high performance mixed signal devices for a variety of industries. NXP designs, manufactures, and sells RF power amplifiers, among other products, through its Secure Interface & Power division. Headquartered in Austin, Texas, Freescale is a manufacturer of standalone semiconductors that perform dedicated power usage functions in a variety of electronic systems for automotive, networking, industrial, and consumer applications. Freescale designs, manufactures, and sells RF E:\FR\FM\08DEN1.SGM 08DEN1 76290 Federal Register / Vol. 80, No. 235 / Tuesday, December 8, 2015 / Notices Lhorne on DSK9F6TC42PROD with NOTICES power amplifiers through its Radio Frequency division. The Relevant Market and Market Structure The relevant line of commerce in which to analyze the effects of the Acquisition is no broader than RF power amplifiers. RF power amplifiers (also referred to as RF power transistors) are high power (>1 watt average output power) semiconductors that increase the strength of radio signals transmitted between electronic devices. The largest application for RF power amplifiers, accounting for roughly 70% of revenues, is wireless infrastructure—i.e., cellular base stations (cell towers). Other applications include aviation, industrial, broadcasting, and noncellular communications such as land mobile radio, as well as potential future applications for cooking and lighting. RF power transistors are manufactured using specialty process technologies in order to deliver high output power and heat dissipation. The two principal technologies are (i) silicon based laterally-diffused metal oxide semiconductor (‘‘LDMOS’’) and (ii) gallium nitride on silicon carbide substrate (‘‘GaN’’). LDMOS technology accounts for roughly 90% of RF power amplifiers used in wireless infrastructure. According to customers and other market participants, there are no substitutes for RF power amplifiers. The relevant geographic market for RF power amplifiers is worldwide. The three major RF power amplifier suppliers (see below) manufacture the products in facilities around the world, and ship the products from those facilities to customer locations worldwide. There are currently no regulatory barriers, tariffs, or technical specifications that impede worldwide trade, and transportation costs are low. The RF power amplifier market is characterized by a limited number of suppliers, including Freescale, the largest supplier with 36.6% of the market, and NXP, the second-largest supplier with 25.1% of the market. Infineon Technologies AG (‘‘Infineon’’) is the third largest supplier. Freescale, NXP, and Infineon are the only meaningful suppliers of LDMOS-based RF power amplifiers. Infineon, however, has a significantly smaller RF power portfolio than either Freescale or NXP. Several additional companies supply GaN-based RF power amplifiers only, but have small market shares. The proposed NXP/Freescale combination would cause a moderately concentrated market for RF power amplifiers to become highly concentrated, increasing the Herfindahl- VerDate Sep<11>2014 14:17 Dec 07, 2015 Jkt 238001 Hirschman Index from 2,203 to 4,040 (a delta of 1,837). This increase in concentration far exceeds the thresholds set out in the Horizontal Merger Guidelines for raising a presumption that the Acquisition would create or enhance market power. Entry Entry into the RF power amplifier market is not likely to deter or counteract any anticompetitive effects of the proposed Acquisition. Entry is unlikely in light of high capital costs, significant switching costs by customers, and the considerable time it would take for customers to develop trust in a new entrant’s products. The same barriers would apply to an expansion into LDMOS-based RF power amplifiers by companies that currently supply only GaN-based RF power amplifiers. Effects of the Acquisition Absent a divestiture, the proposed Acquisition is likely to cause competitive harm in the market for RF power amplifiers. NXP and Freescale compete directly for RF power amplifier sales, and customers benefit from that competition in terms of both pricing and product innovation. Customers describe NXP and Freescale as each other’s closest competitors, and the parties appear to view each other the same way. By eliminating the competition between NXP and Freescale, the proposed Acquisition likely would lead to unilateral effects in the form of higher prices and reduced innovation, particularly in the wireless infrastructure segment. The Consent Agreement The Consent Agreement restores the competition lost from NXP’s proposed acquisition of Freescale by requiring NXP to divest its RF power amplifier business to JAC, a Chinese private equity management fund. The proposed divestiture includes everything needed for JAC to compete effectively in the worldwide market for RF power amplifiers. Under the Order, NXP is required, no later than ten days from the close of the NXP/Freescale transaction, to divest its RF power amplifier assets to JAC. The assets to be divested include a manufacturing facility located in Cabuyao (Philippines), a building in Nijmegen (the Netherlands) to house management and certain R&D and testing labs, all manufacturing and R&D assets used primarily for the RF power amplifier business, and customer support equipment. Additionally, the divestiture package includes all patents PO 00000 Frm 00031 Fmt 4703 Sfmt 4703 and technologies that are exclusively or predominantly used for the RF power amplifier business, and a royalty-free license to use all other NXP patents and technologies required by that business. Finally, the divestiture package includes the transition of NXP’s RF power amplifier employees, including the complete management team, to JAC. The manufacturing assets in the divestiture package include NXP’s RF power amplifier back-end manufacturing assets (including the portion of the Philippines facility dedicated to these products) but not its front-end manufacturing assets. Instead, JAC will outsource its front-end manufacturing to a third-party wafer foundry. In the interim, the Order requires that, at the request of JAC and in a manner approved by the Commission, NXP must provide frontend wafer manufacturing for a period of up to sixty months. Similarly, the Order also requires NXP to provide support services such as logistical and administrative support for a period of up to thirty-six months. In addition, the Order includes other standard terms designed to ensure the viability of the divested business. NXP must assist JAC in hiring the existing work force of NXP’s RF power amplifier business, and must refrain from soliciting those employees for two years. A Monitor will oversee NXP’s compliance with the obligations set forth in the Order. If NXP does not fully comply with the divestiture and requirements of the Order, the Commission may appoint a Divestiture Trustee to divest the RF power amplifier assets and perform NXP’s other obligations consistent with the Order. Given the robustness of the divested business and the protections contained in the Order, the divestiture of NXP’s RF power amplifier assets to JAC is likely to preserve competition. Potential customers have confirmed that the divested assets include everything necessary to compete effectively as a viable business. Similarly, potential customers have confirmed that JAC would be a workable option as a supplier. Opportunity for Public Comment The purpose of this analysis is to facilitate public comment on the Consent Agreement to aid the Commission in determining whether it should make the Consent Agreement final. This analysis is not an official interpretation of the proposed Consent Agreement and does not modify its terms in any way. E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 80, No. 235 / Tuesday, December 8, 2015 / Notices By direction of the Commission. Donald S. Clark, Secretary. Proposed Project National Health Interview Survey (NHIS) (OMB Control No. 0920–0214, expires 12/31/2017)—Revision— National Center for Health Statistics (NCHS), Centers for Disease Control and Prevention (CDC). [FR Doc. 2015–30894 Filed 12–7–15; 8:45 am] BILLING CODE 6750–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Background and Brief Description Centers for Disease Control and Prevention [30Day–15–0214; Docket No. CDC–2015– 0076] Lhorne on DSK9F6TC42PROD with NOTICES Agency Forms Undergoing Paperwork Reduction Act Review The Centers for Disease Control and Prevention (CDC) has submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The notice for the proposed information collection is published to obtain comments from the public and affected agencies. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address any of the following: (a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) Enhance the quality, utility, and clarity of the information to be collected; (d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses; and (e) Assess information collection costs. To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639–7570 or send an email to omb@cdc.gov. Direct written comments and/or suggestions regarding the items contained in this notice to the Attention: CDC Desk Officer, Office of Management and Budget, Washington, DC 20503 or by fax to (202) 395-5806. Written comments should be received within 30 days of this notice. VerDate Sep<11>2014 14:17 Dec 07, 2015 Jkt 238001 Section 306 of the Public Health Service (PHS) Act (42 U.S.C. 242k), as amended, authorizes that the Secretary of Health and Human Services (DHHS), acting through NCHS, shall collect data on the extent and nature of illness and disability of the population of the United States. The annual National Health Interview Survey is a major source of general statistics on the health of the U.S. population and has been in the field continuously since 1957. Clearance is sought for three years, to collect data from 2016 to 2018. This voluntary and confidential householdbased survey collects demographic and health-related information from a nationally representative sample of noninstitutionalized, civilian persons and households throughout the country. Personal identification information is requested from survey respondents to facilitate linkage of survey data with health-related administrative and other records. In 2016 the NHIS will collect information from approximately 45,000 households, which contain about 112,000 individuals. Information is collected using computer assisted personal interviews (CAPI). A core set of data is collected each year that remains largely unchanged, whereas sponsored supplements vary from year to year. The core set includes socio-demographic characteristics, health status, health care services, and health behaviors. For 2016, supplemental questions will be cycled in pertaining to balance, blood donation, chronic pain, diabetes, and vision. Supplemental topics that continue or are enhanced from 2015 pertain to family food security, heart disease and stroke, inflammatory bowel disease, hepatitis B and C screening, children’s mental health, disability and functioning, smokeless tobacco and ecigarettes, and immunizations. Questions from 2015 on cancer control, epilepsy, and occupational health have been removed. In addition to these core and supplemental modules, a followback survey will be conducted on previous NHIS respondents to collect additional health related information using alternative question wording and data collection modes as a testbed for the intended 2018 redesign of the NHIS PO 00000 Frm 00032 Fmt 4703 Sfmt 4703 76291 questionnaire. In addition, a subsample of NHIS respondents may be identified to participate in a pilot test to assess the feasibility of integrating wearable devices into the NHIS data collection process. The aim is to directly track health measurements, to compare those measurements to the self-reported health information provided by respondents, and to assess the role of devices in reducing respondent burden. A new sampling strategy is being implemented in 2016 and for the foreseeable future. This new sampling design is necessitated by the prior 2006– 2015 sample being exhausted, and will take into account demographic shifts in the U.S. civilian noninstitutionalized population. It will also be more flexible allowing for additions and contractions to reflect funding availability and to meet estimation goals. As in previous years, the base sample will remain at approximately 35,000 completed household interviews annually. To balance the precision of national and state-based estimates, most of the sample (approximately 25,000 completed interviews) will be allocated proportionally to the state population to maximize the precision of national-level estimates. A smaller portion of the sample (approximately 10,000 completed interviews) will be shifted to increase sample in the 10 least populous states, enabling state-level estimates of key variables to be produced for all 50 states and DC by pooling 3 years of data. This flexibility embedded in the new sampling plan reflects. Additional funding to improve state-level estimates will increase the sample by almost 10,000 completed interviews in midsize states bringing the total expected sample size in 2016 to 45,000 households. Whereas the sampling frame for the NHIS has traditionally used field listing by the Census Bureau, in order to contain costs, the new frame will use a commercially available address list that covers residential addresses within all 50 states and the District of Columbia. Some field listing will be undertaken to improve coverage in rural areas, in high density areas, and of university housing units. This represents a substantial reduction in the number of listings performed annually. It is anticipated that this new sampling plan will not affect estimates generated using NHIS data. To monitor the new design’s performance, NHIS analysts will perform monthly checks in line with the ones currently performed as part of routine data review. NCHS receives raw data files monthly from the Census Bureau for processing and quality review. Each year, results from the January sample are compared to the E:\FR\FM\08DEN1.SGM 08DEN1

Agencies

[Federal Register Volume 80, Number 235 (Tuesday, December 8, 2015)]
[Notices]
[Pages 76288-76291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-30894]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 151 0090]


NXP Semiconductors N.V.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the draft complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before December 28, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/nxpsemiconductorsconsent online or on 
paper, by following the instructions in the Request for Comment part of 
the SUPPLEMENTARY INFORMATION section below. Write ``NXP Semiconductors 
N.V.--Consent Agreement; File No.151-0090'' on your comment and file 
your comment online at https://ftcpublic.commentworks.com/ftc/nxpsemiconductorsconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, write ``NXP 
Semiconductors N.V.--Consent Agreement; File No.151-0090'' on your 
comment and on the envelope, and mail your comment to the following 
address: Federal Trade Commission, Office of the Secretary, 600 
Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, 
or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Meredith Levert (202-326-2881), Bureau 
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

[[Page 76289]]


SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing consent orders to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for November 25, 2015), on the World Wide Web, 
at http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before December 28, 
2015. Write ``NXP Semiconductors N.V.--Consent Agreement; File No.151-
0090'' on your comment. Your comment--including your name and your 
state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the public Commission Web 
site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of 
discretion, the Commission tries to remove individuals' home contact 
information from comments before placing them on the Commission Web 
site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
---------------------------------------------------------------------------

    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/nxpsemiconductorsconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``NXP Semiconductors 
N.V.--Consent Agreement; File No.151-0090'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before December 28, 2015. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted from NXP 
Semiconductors N.V. (``NXP''), subject to final approval, an Agreement 
Containing Consent Orders (``Consent Agreement'') designed to remedy 
the anticompetitive effects resulting from NXP's proposed acquisition 
of Freescale Semiconductor Ltd. (``Freescale'').
    On March 1, 2015, NXP and Freescale executed an Agreement and Plan 
of Merger (``Merger Agreement'') pursuant to which NXP will acquire all 
of Freescale's common stock in a transaction valued at approximately 
$11.8 billion (``Acquisition''). The proposed Acquisition would combine 
the two largest suppliers of RF power amplifiers. The Commission's 
Complaint alleges that the proposed Acquisition, if consummated, would 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and 
Section 5 of the FTC Act, as amended, 15 U.S.C. 45, by substantially 
lessening competition in the worldwide market for RF power amplifiers.
    Under the terms of the proposed Decision and Order (``Order'') 
contained in the Consent Agreement, NXP is required, no later than ten 
days from the close of the NXP/Freescale transaction, to divest its RF 
power amplifier assets to Jianguang Asset Management Co., Ltd. 
(``JAC''). The divestiture package includes a manufacturing facility, 
manufacturing equipment, intellectual property, and customer and 
supplier contracts. NXP's RF power employees, including the leadership 
of the business, will also transfer to JAC. The Consent Agreement 
provides JAC with everything needed to compete effectively in the RF 
power amplifier market.
    The Consent Agreement has been placed on the public record for 30 
days to solicit comments from interested persons. Comments received 
during this period will become part of the public record. After 30 
days, the Commission will again review the Consent Agreement and the 
comments received, and decide whether it should withdraw from the 
Consent Agreement, modify it, or make it final.

The Parties

    Headquartered in the Netherlands, NXP is a semiconductor developer 
and manufacturer specializing in high performance mixed signal devices 
for a variety of industries. NXP designs, manufactures, and sells RF 
power amplifiers, among other products, through its Secure Interface & 
Power division.
    Headquartered in Austin, Texas, Freescale is a manufacturer of 
stand-alone semiconductors that perform dedicated power usage functions 
in a variety of electronic systems for automotive, networking, 
industrial, and consumer applications. Freescale designs, manufactures, 
and sells RF

[[Page 76290]]

power amplifiers through its Radio Frequency division.

The Relevant Market and Market Structure

    The relevant line of commerce in which to analyze the effects of 
the Acquisition is no broader than RF power amplifiers. RF power 
amplifiers (also referred to as RF power transistors) are high power 
(>1 watt average output power) semiconductors that increase the 
strength of radio signals transmitted between electronic devices. The 
largest application for RF power amplifiers, accounting for roughly 70% 
of revenues, is wireless infrastructure--i.e., cellular base stations 
(cell towers). Other applications include aviation, industrial, 
broadcasting, and non-cellular communications such as land mobile 
radio, as well as potential future applications for cooking and 
lighting. RF power transistors are manufactured using specialty process 
technologies in order to deliver high output power and heat 
dissipation. The two principal technologies are (i) silicon based 
laterally-diffused metal oxide semiconductor (``LDMOS'') and (ii) 
gallium nitride on silicon carbide substrate (``GaN''). LDMOS 
technology accounts for roughly 90% of RF power amplifiers used in 
wireless infrastructure. According to customers and other market 
participants, there are no substitutes for RF power amplifiers.
    The relevant geographic market for RF power amplifiers is 
worldwide. The three major RF power amplifier suppliers (see below) 
manufacture the products in facilities around the world, and ship the 
products from those facilities to customer locations worldwide. There 
are currently no regulatory barriers, tariffs, or technical 
specifications that impede worldwide trade, and transportation costs 
are low.
    The RF power amplifier market is characterized by a limited number 
of suppliers, including Freescale, the largest supplier with 36.6% of 
the market, and NXP, the second-largest supplier with 25.1% of the 
market. Infineon Technologies AG (``Infineon'') is the third largest 
supplier. Freescale, NXP, and Infineon are the only meaningful 
suppliers of LDMOS-based RF power amplifiers. Infineon, however, has a 
significantly smaller RF power portfolio than either Freescale or NXP. 
Several additional companies supply GaN-based RF power amplifiers only, 
but have small market shares.
    The proposed NXP/Freescale combination would cause a moderately 
concentrated market for RF power amplifiers to become highly 
concentrated, increasing the Herfindahl-Hirschman Index from 2,203 to 
4,040 (a delta of 1,837). This increase in concentration far exceeds 
the thresholds set out in the Horizontal Merger Guidelines for raising 
a presumption that the Acquisition would create or enhance market 
power.

Entry

    Entry into the RF power amplifier market is not likely to deter or 
counteract any anticompetitive effects of the proposed Acquisition. 
Entry is unlikely in light of high capital costs, significant switching 
costs by customers, and the considerable time it would take for 
customers to develop trust in a new entrant's products. The same 
barriers would apply to an expansion into LDMOS-based RF power 
amplifiers by companies that currently supply only GaN-based RF power 
amplifiers.

Effects of the Acquisition

    Absent a divestiture, the proposed Acquisition is likely to cause 
competitive harm in the market for RF power amplifiers. NXP and 
Freescale compete directly for RF power amplifier sales, and customers 
benefit from that competition in terms of both pricing and product 
innovation. Customers describe NXP and Freescale as each other's 
closest competitors, and the parties appear to view each other the same 
way. By eliminating the competition between NXP and Freescale, the 
proposed Acquisition likely would lead to unilateral effects in the 
form of higher prices and reduced innovation, particularly in the 
wireless infrastructure segment.

The Consent Agreement

    The Consent Agreement restores the competition lost from NXP's 
proposed acquisition of Freescale by requiring NXP to divest its RF 
power amplifier business to JAC, a Chinese private equity management 
fund. The proposed divestiture includes everything needed for JAC to 
compete effectively in the worldwide market for RF power amplifiers.
    Under the Order, NXP is required, no later than ten days from the 
close of the NXP/Freescale transaction, to divest its RF power 
amplifier assets to JAC. The assets to be divested include a 
manufacturing facility located in Cabuyao (Philippines), a building in 
Nijmegen (the Netherlands) to house management and certain R&D and 
testing labs, all manufacturing and R&D assets used primarily for the 
RF power amplifier business, and customer support equipment. 
Additionally, the divestiture package includes all patents and 
technologies that are exclusively or predominantly used for the RF 
power amplifier business, and a royalty-free license to use all other 
NXP patents and technologies required by that business. Finally, the 
divestiture package includes the transition of NXP's RF power amplifier 
employees, including the complete management team, to JAC.
    The manufacturing assets in the divestiture package include NXP's 
RF power amplifier back-end manufacturing assets (including the portion 
of the Philippines facility dedicated to these products) but not its 
front-end manufacturing assets. Instead, JAC will outsource its front-
end manufacturing to a third-party wafer foundry. In the interim, the 
Order requires that, at the request of JAC and in a manner approved by 
the Commission, NXP must provide front-end wafer manufacturing for a 
period of up to sixty months. Similarly, the Order also requires NXP to 
provide support services such as logistical and administrative support 
for a period of up to thirty-six months.
    In addition, the Order includes other standard terms designed to 
ensure the viability of the divested business. NXP must assist JAC in 
hiring the existing work force of NXP's RF power amplifier business, 
and must refrain from soliciting those employees for two years. A 
Monitor will oversee NXP's compliance with the obligations set forth in 
the Order. If NXP does not fully comply with the divestiture and 
requirements of the Order, the Commission may appoint a Divestiture 
Trustee to divest the RF power amplifier assets and perform NXP's other 
obligations consistent with the Order.
    Given the robustness of the divested business and the protections 
contained in the Order, the divestiture of NXP's RF power amplifier 
assets to JAC is likely to preserve competition. Potential customers 
have confirmed that the divested assets include everything necessary to 
compete effectively as a viable business. Similarly, potential 
customers have confirmed that JAC would be a workable option as a 
supplier.

Opportunity for Public Comment

    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement to aid the Commission in determining whether it 
should make the Consent Agreement final. This analysis is not an 
official interpretation of the proposed Consent Agreement and does not 
modify its terms in any way.


[[Page 76291]]


    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-30894 Filed 12-7-15; 8:45 am]
BILLING CODE 6750-01-P