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Motorola Spins Off Semiconductor Business

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Original poster
Apr 12, 2001
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Motorola has announced that it is spinning off its semiconductor business into a separate publicly traded company.

The move is said to reflect Motorola's "increasing focus on finished communications products, such as wireless networks and cell phones."

Motorola's Semiconductor group is responsible for their version of the PowerPC processor, that has been used in Apple's laptops and desktop machines in recent years.
 
Article Link
https://www.macrumors.com/2003/10/06/motorola-spins-off-semiconductor-business/
Well

Hopefully the new company will have new management. Anything new has to be better.
 
G6?

Can we assume this is a good move? Probably, eh? The folks at Motorola have been doing a pretty fine job of messing up their semiconductor business.

Squire
 
I think that any step away from moto is a good one. If the new spinoff has its own management and production I think that we will see improvement in the waiting periods for the moto G4s.
 
Motorola had been in a joint venture with another group to produce the Power PC's and couldn't deliver the product and I dont' expect this new venture will do any better. This is just final confirmation that Apple needs to dump the Moto chip entirely and go entirely with IBM.
 
Originally posted by Stike
Bye bye Moto... we will never look back.

Hello IBM :)
Click to expand...
I would say the opposite. It was clear that Motorola's priorities lied elsewhere. If they spinoff their chip manufacturing unit, that new unit will have a very different focus. Their job WILL BE to sell chips. Hence the (possibly) interesting new developments.
 
Short Sighted

I'm amazed at how many people seem to think it would be a "Good Idea®" for Apple to drop Motorola completely.

I've no doubt in IBM's commitment to the PowerPC (they have their own aims and uses for it beside Apple), but to be reliant on only one chip maker is utter foly. Apple needs to keep their options open, and I've no doubt they will, despite Moto's dubious track record.

If this means that Moto stay in the picture then great, but if it means that Moto are trying to isolate themselves in preperation to wind up the semi-conductor division of their buisness, then that is bad for Apple, and bad for us.
 
Guys, they're not doing this to help their semiconductor business. The point of this move is to make their balance sheets look prettier: their semiconductor division is losing so much money that the stuff they actually make a profit on isn't an alluring investment. This way, Motorola-proper can actually look like a decent company while Motorola-processors dies a slow death in the corner with no one watching.
 
Re: Short Sighted

Originally posted by dietsoda
if it means that Moto are trying to isolate themselves in preperation to wind up the semi-conductor division of their buisness, then that is bad for Apple, and bad for us.
Click to expand...
The article says spin-off, not wind-up. So there's hope (apparently).
 
Re: Motorola Spins Off Semiconductor Business

Originally posted by Macrumors
Motorola has announced that it is spinning off its semiconductor business into a seperate publically traded company.

The move is said to reflect Motorola's "increasing focus on finished communications products, such as wireless networks and cell phones."

Motorola's Semiconductor group is responsible for their version of the PowerPC processor, that has been used in Apple's laptops and desktop machines in recent years.
Click to expand...

Spinning off usually has benefits to the spinoff. The original offer price generally goes to the seller. The management team that takes over are the ones who wanted to be separated from the nipple all along and thus are the more "processor centric" folks.

The spinoff can then do a public offering and KEEP THE MONEY.

That usually involves telling a story to investors regarding forward looking statements. Anybody seen this story first hand yet?

Spinning off makes sense for Motorola and depending on how a stock offering goes it could be good for PowerPC at the new unit. PowerPC is now used in a wide variety of components. Not just macs.

This is one story where macrumors should follow the financial wires and disclosures for news.

Rocketman
 
This company will likely be an improvement over motorola's chips (like it was said, motorola's priorities were elsewhere but this company will have to make a profit with their chips) and will likely be used for future consumer Apple products.

However, the G5 is the finest desktop chip ever made... I don't know that this new company would be able to catch up with IBM
 
Originally posted by Goblin2099
Guys, they're not doing this to help their semiconductor business. The point of this move is to make their balance sheets look prettier: their semiconductor division is losing so much money that the stuff they actually make a profit on isn't an alluring investment. This way, Motorola-proper can actually look like a decent company while Motorola-processors dies a slow death in the corner with no one watching.
Click to expand...
Well you are aware that they need to sell it, and that the price they will get will depend on the health of the semiconductor business, comprising whatever they choose to put in it. If they spin-off a entity with loads of debts and very little prospect, well they won't be able cause noone will want it.
 
Originally posted by NicoMan
I would say the opposite. It was clear that Motorola's priorities lied elsewhere. If they spinoff their chip manufacturing unit, that new unit will have a very different focus. Their job WILL BE to sell chips. Hence the (possibly) interesting new developments.
Click to expand...

I agree with NicoMan...

Getting away from a company that just wants to sell phones, has got to be a good thing for the chip business.

Once completed, the spin-off will force the chip business to focus on selling chips and hopefully bring about a much more rapid improvement across the board. This MAY, REPEAT, MAY have the benefit of driving forward SPS's PowerPC development as they look to increase sales and income.

Another thing to remember is that SPS became "asset-light" over the past few years. Meaning they closed up their fabs and outsourced their manufacturing while laying off a ton of people.

Here's to hope :)

:cool:

MM
 
Originally posted by NicoMan
Well you are aware that they need to sell it, and that the price they will get will depend on the health of the semiconductor business, comprising whatever they choose to put in it. If they spin-off a entity with loads of debts and very little prospect, well they won't be able cause noone will want it.
Click to expand...



From a (freindly) news service:

Motorola plans to IPO (initial public offering) a portion of the SPS shares, distributing the remainder to existing Motorola shareholders.

"We are embarking on the creation of a new company, and we are excited about the opportunity ahead of us," said SPS president Scott Anderson. "We have strategic and productivity initiatives already in place that are driving a sustainable difference in our approach to the semiconductor market."

PowerPC processor development and manufacture will also be spun-out as part of the SPS IPO, according to Weyrauch.
Click to expand...

So part IPO and part stock swap. Motorola shareholders will have "free" shares of SPS (whatever they will eventually call it). Only the IPO portion will capitalize projects and the reason Mot is sumping SPS is because it was hemmoraging cash. One wonders if a spinoff can solve that AND maintain any impressive R&D.

I got the impression SPS was being groomed to be a subletting jobshop with a few value added in-house functions.

Rocketman
 
Originally posted by Goblin2099
Guys, they're not doing this to help their semiconductor business. The point of this move is to make their balance sheets look prettier: their semiconductor division is losing so much money that the stuff they actually make a profit on isn't an alluring investment. This way, Motorola-proper can actually look like a decent company while Motorola-processors dies a slow death in the corner with no one watching.
Click to expand...

agreed. This is a market-oriented move on Moto's part. Weren't there rumors recently of Moto looking for a buyer for their semiconductors biz? My guess is that their potential suitors said 'thanks but no thanks.' So Moto had no choice but to loose it. It only goes to show howbadly the division was managed and how far it had fallen.

Anyways, any news is good news, for a down in the dumps outfit like the Moto semiconductor division. Maybe the new management will get their act together and learn how to get decent yields on their chips. Probably not.
 
I like it. Creating a company focussed only producing chips means more R&D, better motivation to get chips out as scheduled, and may even possibly help create some competition for IBM. Don't get me wrong, I love that IBM is producing apple's G5 chips, but competition breeds innovation.
 
IBM is doing a great job, but is it a good idea to rely upon a single supplier? Also, while IBM and Apple are friendly right now, who knows what the future holds? IBM might get annoyed if Apple performs a miracle and gains market share for high end servers, for example. Also, relying on a single chip fab means being at the mercy of the production limits for that fab, as well as sharing with other customers.

Maybe Apple should ask IBM to help build their own fab. The investment required would be huge but a shared use fab with IBM might work. Plus, the new fab could include all of the cutting edge tech such as a .065 micron process, silicon on insulator chips, double gates, etc. A PowerPC 980 chip could easily run at 10 Ghz with production in early 2007. IBM has already been testing chips similar to these with very promising results.

Sun might also want to partner, especially if the fab is built in Texas near their production HQ at TI. Either build new Sparc chips at the fab or convince Sun to switch to PowerPC.

For that matter, perhaps Apple should acquire Sun via a leveraged buyout. Using this method it is possible for a company to acquire another company Solaris shares it's BSD origins with OSX so providing support for legacy Solaris Apps could be possible. More recent SYSV based apps could continue to be supported on existing hardware while newer apps could be built for newer hardware. This could turn into a major migration, as in the move from OS9 to OSX. This would be a dramatic change for Sun, just as it was with Apple. The potential benefits might be worth it for Apple as the acquirer, if not for Sun. Apple would gain a large pool of talented employees and greatly expand their market share.

(edited for clarity- sorry about the confusion)
 
Originally posted by yamabushi
Maybe Apple should ask IBM to help build their own fab. The investment required would be huge but a shared use fab with IBM might work.
Click to expand...

Apple does not have the resources to maintain a fab, and it would not be in their financial interest to have one. Not to mention the fact that they couldnt really afford one. IBM's fab produces chips for IBM, AMD, nVidia etc... An IBM/Apple fab just wouldn't be sensible in my opinion
 
Originally posted by Fender2112
I wonder if the new company will continue the AIM partnership. Maybe IBM will be the buyer.
Click to expand...
That's a very good question. One would hope that the spin-off is the part that retains PowerPC rights.
 
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