See also:
Mannerisms - Private Equity Ruins NXP
Mannerisms - Frans van Houten Leaves NXP
Van Houten resigns NXP CEO post, former Agere exec takes seat

The change of CEO at NXP probably means that a sale of the company is on the cards, according to Europe's leading semiconductor industry analyst company, Future Horizons.

"It seems like the company is being prepared for sale", Malcolm Penn, CEO of Future Horizons, told Electronics Weekly, "Richard Clemmer (NXP's new CEO) is an accountant. He was a CFO. It's a shame because the company should be pursuing global visions, although global visions are currently rather difficult to pursue."

Clemmer took over from former NXP CEO Frans van Houten on January 1st. 2009. Van Houten was CEO of NXP when it was bought, in the autumn of 2006, by a consortium of private equity companies led by Wall Street private equity fund Kohlberg Kravis and Roberts. The company has been haemorrhaging cash.

Penn reckons that there is an alternative to selling or breaking up NXP. "There's always a way out in the semiconductor industry", said Penn, "Philips (NXP's former name) is as good at innovating, if not better, than anybody, but it would take five years."

"You do the R&D, build the new products, market them, beat the competition", added Penn, "there's nothing wrong with NXP. But the present owners don't have the patience to wait for five years."

The problem is that the private equity people have totally different approach to business than the semiconductor people.

"Their motives are so different", said Penn, "the big thing for private equity is just bringing in the money. There's nothing intrinsically wrong with that, but it's a bad fit with an industry like semiconductors."

See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.

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