While waiting to pry loose of Motorola Inc. later this year, Freescale Semiconductor Inc. will be walking the path of other companies like Agere Systems Inc. and Infineon Technologies Inc., which were previously parts of bigger behemoths.
These three companies want to exercise the same independence, savvy and quickness of action as other standalone chip companies like Texas Instruments Inc. and STMicroelectronics.
In pursuing that dream, Freescale has been operating as a wholly owned subsidiary of Motorola for some time. The company took a major step toward being a standalone firm last week by appointing a chairman and chief executive officer in the person of Michel Mayer, a veteran with IBM Corp.
“With the planned separation, Motorola is creating two distinct companies with clearly defined business strategies and investment characteristics,” said Ed Zander, CEO of Motorola. “Motorola will continue as a global leader in wireless, broadband and automotive communications technologies, while Freescale is well positioned to continue to deliver great products for our customers.”
Siemens AG, Infineon’s parent, also has been divesting from the chip company to make it wholly independent. Siemens has reduced its Infineon stake by selling 150 million shares, leaving Siemens with about a 20-percent stake in the semiconductor firm. The sale will earn Siemens $770 million. The German supplier previously had a 40-percent stake in Infineon.
The decision comes as Infineon’s shares have been on the upswing, and analysts expect the chipmaker to remain viable in the market. Infineon is the second-largest chipmaker in Europe and plans to build a $1 billion plant in the United States.
Siemens also appointed a new CEO at Infineon, Thomas Seifert, to succeed Harald Eggers, “who is leaving the company at his own request.”
Agere Systems provides a model for Freescale. The company said its independence from Lucent Technologies Inc. has allowed it to do business with other companies like Nokia Corp. and L.M. Ericsson. Lucent is not even one of its major customers, according to Agere’s Dave Longfellow, vice president of investor and government relations.
Like Agere, Freescale has plans for an initial public offering. Freescale claims that its independence will extend its customer base, give it direct access to capital markets, increase its ability to pursue strategic acquisitions and offer employees more direct incentives, according to its filing with the Securities and Exchange Commission.
But it will still have strong ties with Motorola. “Motorola will commit, on behalf of its cellular subscriber businesses, to purchase from us substantially all its cellular baseband semiconductor requirements,” said Freescale.
