NEW YORK – Rick Clemmer, who took the reins as CEO of debt-ridden NXP Semiconductors nearly four years ago, expects to complete the Dutch chip maker's transition to NXP 2.0 by the end of 2013.
The 2.0 version of NXP will improve its operating margins to 25 percent while growing at a rate 50 percent faster than the semiconductor industry average. All that, Clemmer declared, while continuing to reduce debt.
“We still need to do a few more tweaks, but we think we are well on our way to get there,” Clemmer (left) said in an interview here on Thursday (Oct. 25). While declining to elaborate on those “tweaks," he stressed that NXP boosted operating margins to 19.8 percent in the most recent quarter. “We reduced our net debt to $2.88 billion at the end of the third quarter. That used to be $6 billion."
NXP’s quarterly product revenue was $1.1 billion, a 9 percent sequential growth rate and a 14.4 percent jump from the same period last year.
Over the last year, Clemmer also has quietly rebuilt his management team that includes four ex-CEOs and one ex-CFO. Among them is David French, former Cirrus Logic CEO, who is now responsible for its mixed-signal businesses that targets portable and computing markets.
The other hires are: ex-Qimonda CEO Loh Kin Wah as marketing and sales chief; former Agere CEO Peter Kelly as CFO; Junshi Yamaguchi, formerly CEO of NEC Electronics and Renesas Chairman, to run NXP Japan; and Pete Rodriguez, ex-CEO of Exar, who oversees general purpose logic at NXP.
The impressive roster illustrates Clemmer’s commitment to reinventing NXP as a global enterprise, a fundamental shift from its days as a somewhat insular Dutch company.
Pros, cons of private equity
NXP’s transformation may differ from what many industry observers expected when it was taken over by private equity firms.
Malcolm Penn, CEO of market researcher Future Horizons, told Electronics Weekly three years ago that the private equity firm KKR had “raided NXP” to strip out its “heart and crown jewels into a variety of smaller entities.” The implication was that KKR would harvest spun-out divisions for profits while the downsized company was left with few prospects for future growth.
Clemmer begs to differ.