Speculation concerning a sell-off, merger, or spinout of Motorola Inc.'s Semiconductor Products Sector (SPS) surfaces regularly.
But don't bet the farm on a breakup: there's a lot invested--historical, philosophical, and personal--in that chip business in Austin.
An acquisition of Motorola SPS by STMicroelectronics has been one major source of speculation ever since ST president and CEO Pasquale Pistorio told analysts about a year ago he would like to acquire a company with a significant presence in the United States.
A marriage of ST and SPS seems to make sense for both parties. ST has been one of the world's hottest semiconductor companies, even through the deepest downturn in industry history, rocketing up the list of top suppliers while others have tumbled.
An SPS acquisition would provide a strong presence for ST not only in the United States but also in Asia, particularly in China, which SPS has also strongly targeted. The product portfolios of the two companies would mesh well and provide a strong complement to ST's line by adding Motorola's leadership in MCUs and communications processors.
But too much has been made of the offhand remarks of Robert Growney, then Motorola's president, in August 2001 that the company would consider selling SPS if it didn't soon return to profitability.
Growney has since departed, and Christopher Galvin is now firmly entrenched as CEO and chairman. Galvin represents a direct link to the Galvin family heritage at Motorola and would prefer not to be the one to dismantle that legacy.
Mike Zafirovski is now Motorola's president and has worked closely with SPS. He was likely a key voice in the decision to break with tradition and finally offer SPS' technological and systems handset expertise on a merchant basis.
Fred Shlapak, who took over as SPS president about two and half years ago, promised in August that SPS would snap its string of six consecutive quarters of operating losses in the third quarter of this year. On Oct. 15, the company reported that SPS had posted a $13 million 3Q operating profit.
In August, I asked Shlapak about ST acquiring SPS. "I've been with this company for 31 years, and acquisition or spinoff has been the question for 31 years," he said. "Arguments come up every eight to nine months, but how many companies have been really successful in a spinout? Motorola intends to be successful in the semiconductor business."
All that said, I could certainly be wrong, and a ST-Motorola merger could be announced even before this column hits print. History, however, would indicate Motorola will stay with a pat hand.
To comment, e-mail Darrell Dunn at firstname.lastname@example.org.