Philips, the Dutch electronics group, has just given its clearest signal yet that it may sell or spin off its ailing semiconductor unit, saying it would consider “all options to bring value to shareholders”.
The company said it would start the process to create a separate legal structure - facilitating a sale or float - for the business. A sale looks the most likely outcome, but let's never underestimate the buying power and ego of private equity doods. After all, Siemens managed to make a go of keeping their spun off chip unit Infineon independent.
Looks like the chip industry continues it's path to consolidation whereby a handful of leading companies will find scale and own the space. Philips is wise to get out of chips and consumer facing technologies where they come from far too far behind.
Wise also are they for focusing on the more profitable businesses of medical equipment, lighting and appliances where they can be a world leader. It may create a less sexy group, but hey, it'll pay the bills better. Looks like Philips will survive after all.
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