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Friday, September 01, 2006
Philips morphs into NXP Semiconductor
Apparently the key theme of the Philips Semiconductor transition to a private company, NXP Semiconductor, is 'vibrant' (!). You woundn't guess it from some of the material (see picture).
Another key theme is 'asset light'. By which it seems they wish to be one of the worlds largest fabless chip companies (E4.77bn in 2005), perhaps thinking that fabless is sexy and fast moving and profitable, all the things Philips has struggled with in the past.
And what a past. Apparently there is 53 years of experience to draw on, which is a little ahead of the invention of the transistor, as far as I can remember. I'm sure they mean the electronics expertise, and it's a small quibble, but hey - this is the semiconductor business, not the electronics business.
So what have they got? Calling it NXP is a great sign that the Nexperia platform will stay - years ahead of its time, based around the TriMedia processor core, it needed lots of software development that Philips only realised a few years ago. (Perhaps after they realised they couldn't sell their decoder chips into the Philips set top box business for either SD or HD decoders, which was the main opportunity - especially as Philips Semis dominates the TV chip market)
After all, there is plenty of opportunity, and they see it - targetting E8bn in turnover by 2008, which is aggressive growth.
But they desperately need to get their marketing sorted out - it has been a disaster for several years, but the signs are not hopeful: NXP is just too close to flat speaker developer NXT for comfort, and not really the vibrant image that they are looking for (unless you want a pun on a vibrating speaker). And if they kill the Nexperia product line, it makes the NXP name look very silly!
As a customer, watch out. The Freescale spin out showed the risks involved, with restructuring after restructuring. Now that the private equity investors are in charge, there will be blood (for real this time) on the carpet with a reorganisation that will make the company inward looking for at least 6 months. As it has been inward looking for any years, that won't be stunningly obvious, and hopefully at the end of it the excellent engineering will be complemented by some excellent sales and marketing. But that will be well into 2007 and makes the E8bn target somewhat wishful thinking.
We can only hope.
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