Yesterday, it emerged that one of the private equity groups that in 2006 grabbed 80 percent of the chip maker from Philips wiped 80 percent off the value of its holding.

KKR's holding in NXP now stands on 10 cents on the dollar purchase price, valuing the company at about $1.2 billion.

When KKR teamed up with Silver Lake Partners, Bain Capital, Apax Partners Worldwide LLP and AlpInvest Partners NV to buy an 80 percent stake in NXP in August 2006, together the groups paid Philips about $8 billion.

This is a huge destruction in value in a relatively short time.

And today (Tuesday, March 3), citing the 'unusual' conditions prevailing in the semiconductor industry, NXP management declined to offer any clear guidance for the quarters ahead. It did venture to suggest that, "based on overall consumer sentiment, recent order book development, and expected future trading levels" the chip maker expects a huge 30 to 40 percent sequential sales decline in the first quarter.

The actual figures for fourth quarter sales and profits are also pretty scary, though also difficult to interpret in view of the disposal of the wireless business unit to STMicroelectronics to create ST-NXP Wireless, which has now been realigned to ST-Ericsson and no mention of NXP.

Also today, and as flagged , NXP started efforts to cut its debt by more than $1.3 billion by offering holders of existing notes an exchange for shorter-term, super-priority notes.

The offer is open to holders of about $5.7 billion worth of secured and unsecured debt, but the company set a maximum of 250 million Euros of the new 10 percent super-priority notes due 2013 that it can create for the exchange.

Always assuming holders of the unsecured debt tender their bonds, it is suggested the exchange could wipe out about $1.9 billion worth of debt at a cost of Euros 250 million.

These are huge figures, but probably not that different from some of its peers.

Perhaps the only bit of (relatively) good news in the results is an improvement in the troubled group's cash position, which at the end of 2008 stood just shy of $1.8 billion, up from $1.5 at the end of Q3 2008, indicating a less severe cash burn than many had been expecting.

Of course, cutting the debt was one of the first priorities for Richard Clemmer as he took over in the final days of 2008 from long time NXP CEO Franz van Houten. Thus not much has changed. It is still a priority, so let's hope the bond exchange works, and quickly.

The company can then, hopefully, move on to developing a medium to long term strategy, which Clemmer must have discussed with the itchy private equity owners even as he took the hot seat. And with his background at groups such as Agere and Quantum Corp., that probably includes more joint venture escapades such as the short lived ST-NXP Wireless, and even a possible break-up and sale.

The latter option is unlikely to be an easy one to pull off in the current downturn, but even without the wireless ICs business, NXP does have some excellent semiconductor technologies targeting areas such as consumer, multimedia, automotive and identification.

And on the manufacturing side, we are likely to see even more emphasis on a fab-lite strategy, which was already well under way under van Houten's leadership.