LONDON Could Freescale provide a haven for the communications business unit of Infineon Technologies AG (Munich, Germany) while much of the rest of Infineon is pushed towards Dutch chipmaker NXP BV?
And could such a move allow NXP and Infineon to get together in automotive chips to compete with - Freescale and STMicroelectronics?
Now that Carlo Bozotti, president and CEO of STMicroelectronics has said he is not interested in swallowing Infineon's wireless business operations, the ST-controlled wireless joint venture with NXP, it would seem that another home, or possibly another joint venture needs to be found for Infineon's wireless chips.
Vijay Nagarajan, an engineer at Atheros Communications Inc. (Santa Clara, Calif.) who writes an online diary as a wireless industry analyst, considers it possible.
"One of the possibilities being floated around is a merger with NXP. Another possibility is a wireless JV with Freescale. Also, these possibilities are not mutually exclusive either," Nagarajan, wrote in his blog.
Nagarajan postulates that the political environment in Europe makes the NXP merger a possibility, despite risks to such a strategy – big mergers rarely achieve close to their pre-merger potential. It is also notable that with Infineon opting not to appoint Peter Bauer chief executive he would come into any negotiations with, say Frans van Houten of NXP, at a slight disadvantage.
Perhaps things were deliberately constructed that way to help negotiations stalled under Infineon's CEO (for one more day), Wolfgang Ziebart.
One of the ironies is that independent analysts consider Infineon's offering at the advanced end of the mobile phone spectrum, stronger than those of either NXP or ST. Deutsche Bank analysts put Infineon and Freescale in the second tier of suppliers, NXP in the third tier and ST down in the fourth rank of suppliers (see May 9 story).
It is also clear that Infineon's strength in automotive would complement NXP's desire to work in the auto sector, and both might be happy to get chips made for them by foundry TSMC (see May 16 story).
And keeping that automotive design expertise in Europe, if not the manufacturing, would be important to the likes of Daimler-Chrysler and BMW.
You can be certain that the mandarins with the European Union's corridors of power in Brussels will be taking a position and speaking urgently with Infineon, NXP, Freecale and others about what any re-shaping of Europe's semiconductor industry should look like. It is, after all, by rushing around at such times and nudging at the margins of the free market, that the bureaucrats justify their existence and their salaries.