NXP Semiconductors, best known in the mobile industry as the provider of NFC chips for Apples iPhone 6 and 6 Plus, has announced a merger with Freescale, another chip specialist firm that used to be part of Motorola.

The combined company will be worth just over $40bn (£26bn) following the merger, and will make the firm one of the leaders in the high performance mixed signal semiconductor industry, with annual revenues of $10bn.

The merger is thought to be driven by the rise of Internet-of-Things devices and contactless payments, both of which utilise chips currently produced by the two companies, and with the merger, the new firm will be well placed to take advantage of the growing market in both areas.

“Todays announcement is a transformative step in our objective to become the industry leader in high performance mixed signal solutions,” said Richard Clemmer, CEO of NXP, who will continue on as the president and CEO of the merged company. “The combination of NXP and Freescale creates an industry powerhouse focused on the high growth opportunities in the Smarter World.”

“Both companies have built leadership positions and have a sharp focus on delivering superior value to customers,” said Gregg Lowe, president and CEO of Freescale. “Our combined scale, size and global reach will position our new company to deliver sustainable above market growth. It will also serve to accelerate the strategic plans both companies have invested in, enabling us to deliver more complete solutions to customers.”