Analysis: NXP's options limited as economy worsens

Bolaji Ojo, EE Times
(10/22/2008 1:02 PM EDT)

PHILADELPHIA — NXP Semiconductors executives would be the first to admit that the automotive and multimarket IC vendor is in rather poor shape. They'd also be quick to add they have an aggressive plan to improve the company's fortunes.

They may have only one shot.

NXP is in a troubled state, and some analysts are even questioning its ability to survive in the current economic environment. Even management admits they are racing against time to fix the company's problems, which have now been compounded by the ongoing global financial meltdown and the resulting slowdown in corporate and consumer IT equipment spending.

The company's hope rests on a complex reorganization program introduced on Sept. 12, which would involve a total overhaul of manufacturing, R&D as well as other support functions, many of which NXP hopes to outsource in a bid to cut expenses by as much as $550 million.

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