South Korea's antitrust watchdog on Monday approved the merger between two multinational semiconductor companies, while making certain that the deal did not hurt fair market competition in the country.
  

The Fair Trade Commission said it has consented to NXP Semiconductors N.V. taking over Freescale Semiconductors Ltd. The arrangement would give NXP a solid grip on the local automotive, networking and industrial embedded hardware and software markets.
  

NXP and Freescale are based in the Netherlands and the United States, respectively, and are global manufacturers of non-memory computer chips. NXP reported domestic sales hitting 315.4 billion won ($272.6 million) last year, while Freescale's numbers hit 150.5 billion won.
  

"The approval has been given, but NXP must sell off its radio frequency power transistor business to a third party within six months," the corporate regulator said.
  

The order has been given because the merged company will hold 61.7 percent of South Korea's radio frequency power transistor market, far outpacing its closest competitor Infineon Semiconductors by 52.2 percentage points.
  

Power transistors are bought by companies such as Samsung Electronics, Huawei and Nokia and are widely used in communication transceiver stations, microwave ovens and car ignition systems.
  

"Because of the conditional approval, these companies can buy the products in the open market that should keep prices at current levels," the regulator said.
  

The FTC said that NXP, which has acquired a 100 percent stake in the U.S. company, need not sell operations in such areas as micro controller units, digital signal processor and analogue power ICs.
  

NXP requested the FTC's permission for the merger on June 5, since combined sales of the merged entity easily exceeded the minimum 20 billion won mark for asking state approval.
  

The FTC said it latest decision is in line with ongoing efforts to keep tabs on global merger deals in the semiconductor sector and prevent any possible fallout from affecting the local market. (Yonhap)