Mannerisms

KKR will then sell NXP to Infineon. KKR was the lead company in a consortium of private equity funds which bought NXP in 2006.

The word on the street is that Ziebart valiantly opposed this crackpot plan which is why the Infineon supervisory board is trying to force him out

If all this goes through, there would then be a question mark over Infineon's wireless chip business because NXP recently sold its wireless activities to a joint venture with STMicroelectronics in which NXP holds a 20 per cent interest.

The rationale for the joint venture was that being in the wireless business costs $500 million a year in R&D and that neither ST nor NXP could afford that alone. Infineon's wireless business is about the same size as NXP's and ST's wireless businesses were before they merged. So, if this is the way KKR and NXP think, they will want to merge Infineon's wireless business with someone else. Presumably ST. 

Wolfgang Ziebart is an excellent guy who's done a great job for Infineon. The company is No.2 worldwide in automotive ICs, a brutally competitive market, and No.4 worldwide in wireless ICs, an even more brutally competitive market. It ranks in the top ten semiconductor companies worldwide.

But in the face of Wall Street companies trying to get some money back from their disastrous investment in NXP, and a supervisory board looking for shareholder value above everything, there's not much a CEO, intent on building a long-term future for his company, can do.

If implemented, this plan will be a major disaster for the European semiconductor industry into which so much public money and personal sweat has been invested for the past 24 years.

NXP may live to rue the day it invited Wall Street to participate in Europe's chip industry. If the history of the industry is any judge, these 'rationalisations' will turn out to be disastrous, value-destroying failures, and a huge blow to Europe's future as a chip-making region.