UPDATE 1-NXP to outpace market on mobile wallet chips-CEO

Tue Nov 13, 2012 12:48pm EST

* CEO sees chip market up as much as 5 pct in 2013

* Says NXP to grow at least 50 pct faster than market

* Sales driven by "mobile wallet" technology

By Harro Ten Wolde and Jens Hack

MUNICH, Nov 13 (Reuters) - NXP expects its sales to outpace the wider semiconductor market next year as demand rises for its chips that turn phones into "mobile wallets," the Dutch company's chief executive said.

Rick Clemmer told Reuters he expects the wider market for chips will rise by 5 percent in 2013. "We think we will grow faster than that," he said in an interview on Tuesday.

NXP Semiconductor is one of the world's biggest makers of near-field communications (NFC) chips. NFC technology passes encrypted information between devices at close range without contact.

This enables shoppers to wave their smartphone near a terminal, instead of swiping a credit card, effectively turning an NFC-enabled phone into a "mobile wallet."

Clemmer said demand for NFC chips will outstrip the wider chip market. "(This) will allow us to at least grow 50 percent faster than the market," Clemmer said, adding that by the end of this year the chips will be available in more than 100 million phones.

The global chip market is going though a rough period as sectors from consumer electronics to automotive slow.

According to the Semiconductor Industry Association chip sales so this year are down almost 5 percent.

Apple disappointed NFC proponents including Clemmer in September when it decided not to embed the technology in the iPhone 5.

"Clearly it would have improved the general market," Clemmer said, declining to give any details of discussions he had with Apple.

Clemmer said he expects Apple eventually to endorse the platform. "Some of the technology they implemented (in the iPhone 5) is similar in nature," he said. "Ultimately they will have to implement NFC, but that is their decision."

NXP competes with Skyworks Solutions Inc, RF Micro Devices Inc and Analog Devices Inc.

A consortium of private equity firms, including Kohlberg Kravis Roberts & Co., Bain Capital and Apax Partners bought NXP in 2006 from Dutch conglomerate Philips Electronics.

KKR still owns a 15.8 percent stake, while Bain has 12.8 percent and Apax holds 7.2 percent, Reuters data show, after they floated part of the company's shares in 2010.

Clemmer said he expected that the shareholders would be looking for a good moment to further reduce their holdings.

"They are not here forever," he said. "My guess is they first sold at $30 and when we are back at $30 I would expect they would sell some more (of their stake)."

NXP shares currently trade at around $25.