“We’re still happy with private equity ownership”, van Houten told me in 2007, “when we were owned by Philips we couldn’t invest, and couldn’t behave like a semiconductor company. Since the spin-out we have been consistent in our strategy in cleaning up our portfolio act. The big finale was our wireless joint venture with STMicroelectronics. Now we’re dealing with the aftermath and cleaning up our central R&D.”
Asked if the ST-NXP joint venture really was actually the grand finale, and whether there would be any more disposals of NXP businesses, van Houten replied “No.”
The $1.55 billion which STMicroelectronics was obliged to pay in respect of the ST-NXP joint venture was paid to NXP on the closing of the deal on July 29th. Is NXP going to keep the money?
“Absolutely”, replied van Houten, “we’re not giving it to our owners. We have been saying we will invest it in our company. There are bond covenants which say that if we can’t find investments within a period we have to pay back the bonds. There are a variety of investments that qualify under the bond covenants.”
van Houten closed fabs in the US, Germany, the Netherlands and France. Asked if it was mistaken to rely on foundry wafers which are currently cheap but are expected to become expensive, van Houten replied: “300mm fabs can’t be owned and run efficiently by one IDM. We could not even fill half a 300mm fab. But we don’t see us becoming fabless. We would like to be asset-light - where you spend the money where you add value.”
Asked if any of NXP’s strategy was driven by the private equity owners, van Houten replied: “I’d like to think the strategy is driven by the management team. I am pleased with the support our investors are giving us.”
The following year, 2008, van Houten resigned as CEO of NXP.