By Greg Roumeliotis

(Reuters) - Qualcomm Inc is nearing a deal to acquire NXP Semiconductors NV for around $37 billion, a person familiar with the matter said on Friday, as the U.S. company seeks to expand the reach of its chips from phones to cars.

The deal would make San Diego-based Qualcomm, which supplies Android smartphone makers and Apple Inc, a bigger supplier to the automotive industry as it grapples with slowing smartphone sales and stiff competition from Chinese and Taiwanese rivals.

The acquisition of NXP by Qualcomm for $110 per share in cash could be announced within days, although there is always a possibility of a last-minute glitch, the source said, asking not to be identified because the negotiations are confidential.

Qualcomm and NXP did not immediately respond to requests for comment. CNBC first reported that the companies were nearing a deal for $110 per share.

NXP shares dropped 2.5 percent on the news to $101.90, while Qualcomm shares were up 2.2 percent to $68.77, indicating that the terms were seen by investors as more favorable to Qualcomm than previously expected.

Qualcomm had sat out the transformative consolidation sweeping the industry, which has seen mega-deals such as Avago buying Broadcom for $37 billion last year.

Qualcomm gets the bulk of its revenue from chip sales but most of its profit comes from wireless patents it licenses to the mobile industry. It explored a plan to break up its chip business from its patent licensing unit after pressure from activist investor Jana Partners but decided to remain whole.

Qualcomm ranked third in terms of revenue among global semiconductor companies in 2015, while Eindhoven, Netherlands-based NXP ranked No. 7, according to research firm IHS.

(Reporting by Greg Roumeliotis in New York; Editing by Meredith Mazzilli)