AMSTERDAM, The Netherlands-Royal Philips Electronics, Europe’s largest consumer-electronics producer and its third-largest chipmaker, said it plans to sell or spin off its semiconductor unit into a separate company.
The company explained that early this year, it introduced plans to improve the semiconductor division’s four core businesses of mobile and personal, home, automotive and identification, and multi-market semiconductors. In a statement, Philips said the plan to sell or spin-off the semiconductor division gives the company “flexibility to pursue strategic options for further strengthening the longer-term performance of these activities.”
“While we are pleased with the progress of the business renewal program, we see opportunities to further strengthen the activities and maximize shareholder value, with the step we announced today, in an industry where scale matters,” commented Gerard Kleisterlee, president and chief executive of Philips.
With Philips Semiconductors’ annual sales of $6.6 billion and net income of $538 million in 2004, the spin-off would operate somewhere among the world’s top 10 semiconductor giants. Along with using its chips in household appliances and industrial medical equipment, Philips’ chips are sold to Nokia Corp, Samsung Electronics Co. Ltd., Dell Inc. and Sony Corp.
Philips employs approximately 161,000 employees in more than 60 countries.
