Is Motorola Inc's semiconductor business in more trouble?
Officials from Motorola here indicated that the company would consider shedding its troubled semiconductor business--if the unit does not turn itself around.
Speaking on behalf of Motorola president Robert Growney, a spokesman for the company's investor relations office told analysts this week that the corporation would consider a sale or spin-off of the Semiconductor Products Sector if it does not stem a flow of red ink. In a phone interview with SBN today, a corporate spokeswoman confirmed those remarks, which were originally reported by the Reuters news service.
The disclosure follows a string of setbacks, plant closures, layoffs, and losses within Motorola's semiconductor group, which is based in Austin, Texas. The semiconductor unit posted an operating loss of $381m on shrinking sales of $1.3bn in the second quarter.
Motorola's semiconductor business has slipped in market share in the current industry downturn, falling from to No. 8 in the top 10 rankings, according to IC Insights Inc. The Scottsdale, Arizona-based market research firm has estimated that Motorola's chip revenues dropped 30% in the first half of 2001 to $2.73bn compared to $3.9bn in the first six months of 2000.
The investor relations spokesman said a key factor in Motorola's assessment of the chip business was whether or not it could regain its competitive edge, according to the Reuters report. The news service said Motorola has given the chip business an undisclosed amount of time to reverse a string of losses and poor sales.
In the phone interview with SBN, the Motorola corporate spokeswoman confirmed these statements to analysts, but she added that the chip business was not on the block--at least not for now.
The spokeswoman confirmed that Motorola was still reviewing the future of various businesses, including the Semiconductor Products Sector. "There are no sacred cows and no segment is immune," she added.