Philips Semiconductors to become NXP

PARIS — With a change of ownership from Royal Philips Electronics to a consortium of private equity investment companies, Philips Semiconductors will simply become NXP.

NXP stands for the consumer's "next experience," according to CEO Frans van Houten. NXP is also associated with Philips Semiconductors' Nexperia platform where audio and video processing technologies reside.

The NXP trademark will include a "Founded by Philips" tagline as part of its branding. "We want to create the bridge between the 'next experience' and our rich heritage," said van Houten. "We have agreed as part of the disentanglement that we can use the Philips brand link to NXP."

NXP CEO Frans van Houten

In an interview, van Houton laid out several new business priorities. First, NXP is planning a strategic investment in cellular baseband technologies in order to save what appears to be a lackluster baseband business. The move would also help it gain substantial market share in the mobile wireless sector.

NXP will also make a sizable investment in development tools to increase product quality. "Quality, too often, has become an odd one out," he said, suffering at the expense of the company's pursuit of "cost and time-to-market.

"If you have to re-spin your SoC three times to get it right, you are not only delivering a product to your customers nine months late, but you are also increasing the cost of development," he said.

Citing massive recalls of notebook computers with faulty batteries in recent weeks, van Houten noted, "We will never want to be the reason for recalled products. Quality is very important."

Van Houten said NXP will "raise the development budget" for products, "seeking the best tools." He added, "We will not skimp on quality, and we will aim for zero defect and first-time-right silicon."

—Colin Holland contributed to this report.