The Hindu Business Line : Philips hives off Indian semiconductor biz to new entity

Following the move to sell-off its global semiconductor business, Philips said on Monday that it has hived off its semiconductor business and research in India into a new entity. The new entity will be called NXP Semiconductors India, which will be operational from October 1.

Philips Electronics India Ltd had already floated a new entity Philips Semiconductors (India), about three months ago, following the decision of the parent company to sell a majority stake in the semiconductor business to private equity firms.

Recently, Royal Philips had agreed to sell 80.1 per cent stake in its semiconductor business to private equity investors Kohlberg Kravis Roberts & Co, Bain Capital, Silver Lake Partners, Apax Partners and AlpInvest Partners NV in a deal exceeding $10 billion. Royal Philips will hold a minority stake of 19.9 per cent in the new company called the NXP Semiconductors.

Philips Semiconductor India is being rechristened as NXP Semiconductors India, Mr K. Ramachandran, CEO, Philips Electronics India Ltd, told a press conference. The re-christened NXP Semiconductors India would hold the semiconductor business apart from the semiconductor vertical of Philips Innovation Centre, he said. With over 700 people, it would be headquartered in Bangalore, he added.

The acronym NXP stands for "Next Experience". NXP Semiconductors India CEO, Mr Rajeev Mehtani said the company would invest over $6 million in a new campus at Bangalore, besides investing about $320 million over the next five years in ramping up the operations.

NXP India would focus on developing solutions in segments such as automotive, identification, home, mobile and personal, multi-market semiconductors and software businesses. Apart from having its own R&D unit, NXP would outsource some of its work to Indian software firms, Mr Mehtani said.

At present, NXP Semiconductors India is working with about five Indian software and design vendors, which the company plans to increase to 20 soon, Mr Mehtani said. "We are in talks with several other companies to rope in them as partners," he said.

The company was presently working on leading edge technologies in 90 nanometer and 65 nanometer processes, in the areas of chip design and embedded software and systems. Mr Mehtani said NXP India was a top five semiconductor MNC employer and a top three merchant semiconductor supplier to the Indian electronic industry. NXP India's current year's revenue is estimated at Rs 500 crore, Mr Ramachandran said.

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