Global Sources
EE Times-India
Stay in touch with EE Times India
 
EE Times-India > Manufacturing/Packaging
 
 
Manufacturing/Packaging  

Mayer decides to step down as Freescale CEO

Posted: 12 Feb 2008     Print Version  Bookmark and Share

Keywords:Freescale CEO  chipmaker 

Michel Mayer
Figure: Michel Mayer, chairman and CEO of Freescale Semiconductor decides to step down

Freescale Semiconductor Inc. announced that Michel Mayer has decided to step down from his chairman and CEO posts.

The question is whether Mayer was ousted amid ongoing losses and problems at the chipmaker. Some also wonder if the sudden move portends other changes at Freescale, including the breakup of the company or a move to find a suitor.

Meanwhile, Freescale and its board of directors have initiated a search for a new CEO. Mayer will continue in his current role until a successor has been identified and will remain chairman of the board until the transition is effective.

Mayer joined Freescale in 2004 and led the company through its transition from a semiconductor division of Motorola Inc. to a public company following an initial public offering in July of 2004. In December 2006, Freescale became the largest leveraged buyout in the history of the technology industry.

Roller-coaster journey
Needless to day, it's been a roller-coaster ride at Freescale. Over the years, Motorola's former and troubled chip unit generally struggled and lost money. But as an independent company prior to the buyout, Freescale somewhat turned the corner and generated profits, thanks in part to its strong networking, automotive and wireless lines.

Then, in September of 2006, Freescale entered into a definitive merger agreement to be acquired by a private equity consortium in a transaction with a total equity value of Rs.69,481.97 crore ($17.6 billion). The consortium is led by The Blackstone Group, and includes The Carlyle Group, Permira Funds and Texas Pacific Group.

Stockholders of Freescale Semiconductor in November of 2006 approved the previously-announced acquisition of Freescale by a consortium of private equity firms.

Since it went private, Freescale has struggled and lost huge sums of money. Some wonder if the private-equity experiment failed. But in reality, the company lost money, due in part to the wireless troubles at one customer: Motorola Inc. Freescale sells its wireless chips and other products to Motorola. (Ironically Motorola's CEO was recently replaced.)

"For Freescale, it's a challenging time," said Ray Bingham, managing director with General Atlantic LLC, a global growth equity firm, in a recent panel. Bingham is a former board member of Freescale. He also sits on the board of STMicroelectronics and other firms

In the red
Recently, Freescale moved to expand its business. This month, Freescale said it has agreed to purchase SigmaTel Inc. for about Rs.434.26 crore ($110 million) to secure complementary analogue ICs as it diversifies sales into the digital and consumer electronics markets.

Over time, though, some observers look for a breakup of Freescale in an effort to salvage the company. Infineon Technologies AG could buy some or all of Freescale, observers speculated. NXP Semiconductors or STMicroelectronics Inc. may buy some of the pieces of Freescale, observers speculated.

In 2007, Freescale lost Rs.6,356.02 crore ($1.61 billion) on sales of Rs.22,581.64 crore ($5.72 billion). This compares to a loss of Rs.7,856.20 crore ($1.99 billion) on sales of Rs.25,108.26 crore ($6.36 billion) in 2006.

Freescale's net loss narrowed sharply in Q4 07 on a five-percentage point improvement in gross profit margins and the absence of special charges that hurt its financial performance in the year-ago period. The company reported a net loss of Rs.2,072.62 crore ($525 million) for the three months ended Dec. 31 compared with a net loss of Rs.10,659.17 crore ($2.7 billion) in Q4 06.

The year-ago quarter results included a hefty Rs.8,922.12 crore ($2.26 billion) charge for in-process research and development. Revenue in the latest quarter dropped to Rs.6,079.67 crore ($1.54 billion) from Rs.6,395.50 crore ($1.62 billion) in the comparable 2006 quarter.

- Mark LaPedus
EE Times




Comment on "Mayer decides to step down as Freesc..."
Comments:  
*  You can enter [0] more charecters.
*Verify code:
 
 
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

 

Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

 
Back to Top