Is Moto's IC unit still up for sale?

Word on the street is that Motorola Inc.'s semiconductor unit is still up for sale. The problem: there are no buyers for the unit--yet, according to sources in the industry.

In recent months, rumors were running rampant that STMicroelectronics Inc. would acquire Moto's chip unit. Both companies denied those rumors even though it was common knowledge that Moto's troubled semiconductor division was (and still is) on the block.

One of the major stumbling blocks for STMicro was clear: Moto was saddled with far too much fab capacity despite moving more and more of its chip production to outside foundries like Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).

So when will the shoe drop? For some time, Wall Street has been breathing down Moto's neck to put its chip unit in order--or get out of the business, according to industry sources.

The company bought some time, when its semiconductor division turned a profit in the fourth quarter of last year. Then, suddenly, the group went back to its old ways and fell into red in Q1 of 2003.

The big decision may come in Q2. If the unit remains in the red, then Wall Street may urge the company to pull out the carving knife.

However, there was plenty of speculation this week, especially when the unit's president decided to retire after three "horrible" years on the job (see June 4 story ).