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NXP reorg raises questions on future plans

Posted: 08 Oct 2009     Print Version  Bookmark and Share

Keywords:digital TV  STB  NXP plans  automotive 

Rick Clemmer has certainly changed the face of NXP Semiconductors. One year into his tenure at the chip vendor, the NXP president and CEO has sold business units, paid down debts through some ingenious financing moves, made a few strategic acquisitions, and in the latest deal announced Oct. 5, created a joint venture that could offer the company a hefty payoff only a few years from now.

What NXP will look like once Clemmer completes the reorganisation of the company remains unclear, however. The question becomes even more pressing with NXP's decision to transfer its TV systems and digital STB business to Trident Microsystems Inc., creating a bigger player in the sector but leaving Clemmer's company even smaller than when he took it over in 2008.

The Trident transaction also raises questions about NXP's longer-term plans for its home entertainment business, the division from which the TV systems and digital STB units were carved out before being tossed over to Trident.

Will NXP eventually sell the home entertainment division to concentrate on the automotive IC and multi-market semiconductor divisions, both of which dwarf the home business?

There is at least one more fundamental question NXP executives must deal with. Recent transactions, including the agreement to sell the wireless IC business to fellow European IC vendor STMicroelectronics N.V., raises the spectre of a company being slowly broken up into pieces to be gobbled up by bigger competitors.

Clemmer rejected this impression during a conference call to discuss the Trident deal, insisting that NXP is "here for the long term and we are here to create value in the long term. This transaction helps facilitate that. We think that the combination of Trident with our digital TV and STB businesses gives an excellent opportunity in the marketplace just like what we are trying to do with our high performance mixed signal solutions."

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