Motorola Chairman and Chief Executive Officer Christopher Galvin announced Monday that the company intends to separate its semiconductor operations — the “world's #1 embedded processor company” — into an independent, publicly traded company. SPS is responsible for such processors as the PowerPC, PowerQUICC, ARM-based DragonBall i.MX, and ColdFire processors.

According to the announcement, “this action reflects Motorola's intention to increase its focus on communications and integrated electronic systems, as well as create an exciting opportunity for the company's Semiconductor Products Sector (SPS) as an independent semiconductor company with its own focused strategy.” Motorola said it has not finalized details of the transaction.

“The semiconductor industry cycle appears to be in an upswing,” Motorola said. “Therefore, Motorola believes the time is right to take these actions.”

One potential benefit of having its own publicly traded equity will be to allow SPS to pursue acquisitions of additional strategic product lines and technology using semiconductor equity valuations instead of today's blended equity valuation of Motorola.

“Over the past several months, we have carefully weighed the best way to optimize the long-term potential of Motorola's semiconductor business with the leverage we would gain by concentrating our resources on our communications products and integrated electronic systems businesses,” said Galvin. “After completing our four-month-long technology and strategic reviews in August, I recommended to the board of directors in September that Motorola focus its future on retaining and augmenting all five Motorola sectors that compose our communications products and integrated electronic systems businesses and that our 'asset light' semiconductor business could prosper as a separate entity. Our board of directors has given its full support to this recommendation.”

“We are embarking on the creation of a new company, and we are excited about the opportunity ahead of us,” commented Scott Anderson, president of Motorola SPS. “We have a differentiated business model in 'asset light'; an experienced, talented management team; an energetic workforce; and strategic and productivity initiatives already in place that are driving a sustainable difference in our approach to the semiconductor market. We believe SPS is well positioned to increase its leadership in the end markets it serves, including the networking, communications, transportation and industrial markets.”

After the spinout of SPS, Motorola's remaining portfolio will include:

• Cellular handsets and related software and services -- Personal Communications Sector
  
• Cellular network infrastructure, software and services -- Global Telecom Solutions Sector
  
• Integrated radio communications and information solutions for public safety, government and enterprises -- Commercial, Government and Industrial Solutions Sector
  
• Automotive electronics, embedded computing systems and portable energy systems -- Integrated Electronic Systems Sector
  
• Cable and broadband communications devices and technology -- Broadband Communications Sector

 
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