Philips Semiconductors will become NXP as it shifts from being a Royal Philips Electronics business unit to majority ownership by a consortium of private equity companies.
The announcement came after Philips last month announced a more than $10 billion deal that will see Kohlberg Kravis Roberts & Co., Bain Capital, Silver Lake Partners, Apax and AlpInvest Partners NV take an 80.1 percent stake in the semiconductor operation with Philips retaining a 19.9 percent interest.
Philips Semiconductors CEO Frans van Houten will stay at the helm of NXP, which stands for Next Experience.
"Today we take control of our own destiny and start to shape the future of the semiconductor industry," van Houten said in a statement from the Internationale Funkausstellung consumer electronics show in Berlin. "We enable our customers to build better products, based on our next generation vibrant media technologies. Put simply, we're enabling the next generation of consumer entertainment products. In order to emphasize the rich heritage that NXP gained from 53 years as part of Royal Philips, the NXP name will be supported by the tagline founded by Philips."
Van Houten further confirmed that NXP will continue its current business renewal strategy, which has been under way for 18 months and aims to see the business' profitability climb to between 5 percent and 15 percent.
In doing so, the new company will see investment of $1.28 billion (1 billion Euro) in R&D and an asset light manufacturing strategy, and plans to maintain its approximate 37,000 employees.
Van Houten also noted in the statement that NXP will have more than $1.53 billion (1.2 billion Euro) in cash and credit reserves, allowing a financial buffer so that the company can explore options for acquisitions.
NXP will continue to focus on automotive, identification, home, mobile and personal, and multimarket semiconductors as its five main businesses. To complement existing work, a center dedicated to emerging technologies has been established within NXP with close to 600 scientists joining from Philips Research and Applied Technologies, putting the company's total R&D headcount at more than 6,700 engineers.
"We want to be a leader in everything we do," said van Houten. "NXP already has number one market share in areas such as TV chips, contactless identification for e-passports, RFID for electronic ticketing in public transport, car radio digital signal processors and key mobile phone system solutions."
NXP will remain headquartered in Eindhoven, the Netherlands.
- Electronic News
