Motorola spins out chip firm

Motorola spins out chip firm
David Manners A new semiconductor company will be founded in the third quarter with the spin-out of Motorola’s semiconductor components group (SCG) into a separate entity backed by the Texas Pacific Group (TP). “Texas Pacific is purchasing 90 per cent of the equity, ten per cent is staying with Motorola but our management will have access to some of TP’s equity,” said Steve Hanson, SCG’s boss, who will be president of the spin-off. SCG comprised Motorola’s discretes, analogue and logic businesses and had sales of $1.7bn in 1998. Motorola receives $1.6bn in the deal. Employment is unaffected. “We need to put in a corporate structure which means an increase in white collar jobs and our manufacturing bases are ramping strongly so there will be a net increase in employment,” Hanson told Electronics Weekly. The group has fabs in Phoenix, the Czech Republic, Slovakia and China. On timing, Hanson said: “The market is recovering from the double dip 96-98 recession, while SCG has gone through the Motorola renewal process which involved restructuring and closure of some manufacturing operations. We have developed a well understood business model able to generate growth and profits. We were profitable in ’98 and, in ’99, are continuously improving on a regular basis.” Independence will allow the group to re-invest profits in key areas which Hanson listed as: analogue power management, power switching products which SCG calls EMOS, and ECL where the group has 80 per cent market share.


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