Comment: Philips IPO transition hints at job cuts

However, the devil is in the detail and it could be the forerunner of transitional job cuts as Philips seeks to separate its semiconductor interests into a subsidiary company prior to an IPO or merger.

The significant event Wednesday was that Gerard Kleisterlee, president and chief executive officer of Philips (Amsterdam, The Netherlands), wrote an email to employees in which he discussed a process that was "on track" and the need to accelerate plans.

These plans include the formation of a separate subsidiary company to encapsulate Philips' semiconductor interests prior to its merger or IPO, which must have implications for Philips staff.

And, although a Philips spokesman told EE Times that many courses of action were still possible, the fact that Philips is preparing to select a name for a subsidiary semiconductor company would seem to favor an IPO and may imply that merger discussions going on in the background have started to run out of steam.

At first sight there was little new in the latest announcement. There was nothing new in the timing — the second-half of 2006 — although one can argue that an announcement was necessary to allay fears that Philips might miss its previously announced intentions. The only thing that could vaguely be seen as new was Philips insistence that it expects to dispose of a majority of its stake in semiconductors in this way " so a pure 50:50 partnership with a chip company to form a Philscale or Freelips joint venture has, apparently, been ruled out.

Since Philips announced that it was seeking strategic options for its semiconductor division there has been much speculation about which entities would make a good partner for Philips Semiconductor (see Making book on Philips match). Intel has named alongside Infineon, Freescale and STMicroelectronics as potential partners.