Freescale also announced it
would consolidate its manufacturing operations under David Reed, a
longtime TI exec who more recently led Globalfoundries Inc.'s 28-nm
production in Dresden, Germany. Lowe said Freescale's manufacturing
operations were previously split among several groups, unlike most chip
"I think [Reed's] balance of having worked at a
semiconductor company and having foundry experience is really going to
be helpful to Freescale because we have our own fabs and also use
foundries," Lowe said.
Lowe—who took the reins as Freescale's CEO
in June—had said previously that he would spend his first few months on
the job developing a plan to improve Freescale's market share by
growing the company faster than the overall semiconductor industry.
said it would also re-align its R8D spending to focus about 90 percent
of spending on the company's product areas of focus. The company said it
would also shift sales resources to align with industry growth in China
and select opportunities in Korea, Taiwan and Japan.
Freescale said its restructuring moves are expected to save the company $35 million to $40 million per year.
Thursday, Freescale reported financial results for the third quarter,
ended Sept. 28, and provided a forecast for the fourth quarter.
(Austin, Texas) reported quarterly sales of $1.01 billion, down 2
percent from the second quarter and down 11 percent from the third
quarter of 2011. The company reported a net loss for the quarter of $24
million, or 10 cents per share, narrowed from both the previous and
For the fourth quarter, Freescale said it expects sales to fall to between $920 million and $960 million.
cited general economic malaise as the biggest reason for the projected
sales decline. Freescale, like other chip firms, has been hurt by weak
While he said he was hesitant to make
predictions about next year, Lowe said the projections given by chip
companies point to a sixth straight quarter of revenue decline versus
the year-ago quarter, which he said would match the industry's longest
streak ever. On the other hand, he said, negative economic news abounds,
from the Eurozone crisis to an economic slowdown in China.
The reason Freescale is slowly going to the dumpster is that a design engineer would be stupid to develop a product with any of their parts. It is expensive and time consuming to develop a new product only to learn that some day soon a bean counter at Freescale says... well these customers are not worth keeping so kill the following parts. Take a page from the competition that promises that none of their parts will ever be discontinued (they keep it too). Funny those companies that follow this motto are swallowing their competition, well the ones worth it.
The fix for the company requires a new CEO and executive team that focus on long-term growth rather than their short-term bonuses.
Correct, Freescale does have a product longevity program that offers stability of supply for a broad range of products for 10 years (minimum) to 15 years, depending on the market segment the product serves. Details about the program are available on Freescaleís web site at http://www.freescale.com/productlongevity.
As Dylan points out, Freescale recently announced the results of an extensive strategic review, which included a realignment around five core product areas: Microcontrollers, Digital Networking, Automotive MCU, Analog & Sensors and RF. R&D resources are being reallocated to these areas. The company also announced the appointment of key individuals to join Freescale in strategic areas such as manufacturing operations and product businesses. All of these efforts allow Freescale to focus in markets where it can grow revenue and accelerate market share gain.
Well, many of our once stellar semiconductor companies are either in crisis or being sold. Part of the reason is total lack of leadership and vision from the company's top management. The fate of National Semiconductor is prime example. It was a great and innovative company in its prime but its board made one bad CEO hiring decision after the other after Charley Sporck's retirement. At the end they hired a CEO who was a mediocre bean counter with no knowledge or even interest in the technology, or in excellence, or innovation. Just as GM almost died due to bean counter incompetence and shortsightedness, National Semi also died for similar reasons by having been swallowed by TI.
@Simon7382, Have you ever thought...the industry is suffering because of commoditization by ARM. If everyone has the same ARM, why should there be 100 silicon vendors? Everything becomes a commodity. Look at Freescale, TI, they are all suffering
The issue with Freescale is that it still thinks its Motorola and it's the late 1980's. Back then the 6805 & 68000 dominated the world making them No.1 globally. Unfortunately this success made everyone at Motorola really arrogant, and they've been that way ever since. Today you have a company with terrible device documentation full or errors, poor software integration or simply a lack of knowledge of 3rd party solutions, microcontroller with a poor mix of peripherals vs memory size (embedded Flash micros), rushed programmes to keep up with innovative competitors (Cortex M4 & M0 devices were rushed into production to combat ST STM32 & NXP LPC1xxx), Badly trained and generally poor quality Field Apps engineers and very poor support channels. Freescale needs to get rid of its 'old school' members and employ fresh blood without all the baggage from the Motorola hey days of the 1980s