What happened

Shares of semiconductor giant Qualcomm (NASDAQ:QCOM) gained 14.2% in July 2018, according to data from S&P Global Market Intelligence. Investors seemed to breathe a sigh of relief as the proposed $44 billion buyout of automotive computing specialist NXP Semiconductors (NASDAQ:NXPI) finally came to a full stop.

So what

Qualcomm set a final deadline for itself, coinciding with the company's third-quarter earnings release. The final regulatory approval of the NXP deal did not arrive on time, as Chinese government bodies continued to drag their feet, so Qualcomm canceled the NXP buyout after nearly two years of simmering drama. At the same time, Qualcomm's own earnings report came in far above expectations. Put together, these two events sent share prices 7% higher the next day.

Qualcomm and NXP logotypes on two large, white puzzle pieces that two men are holding up and not quite fitting together.

These puzzle pieces were never quite combined. Image sources: Getty Images, Qualcomm, and NXP Semiconductors, edited together by the author.

Now what

The supposedly quick and easy path to leadership in the automotive computing market turned into a long ordeal instead, and now Qualcomm must find its own way into new target markets. The smartphone sector that has treated this company so nicely in the last 10 years is starting to fade, so it's high time to come up with new ideas.

But first, Qualcomm has sent a $2 billion breakup fee to NXP and tripled its share buyback program to $30 billion. Fellow Fool.com contributor Leo Sun argues that the company would be better off spending that cash on a handful of smaller buyouts in the Internet of Things space, but those dollars have been earmarked for buybacks.