Siemens spins out semiconductor business

01/01/1999

Siemens spins out semiconductor business

Siemens AG is spinning out its semiconductor business into an independent company, and then taking the operation public. Siemens is restructuring operations by withdrawing from its DM 11 billion (US$647 million) components business segment, comprised of passive components, electron tubes, electromechanical components, and the largest of the groups - semiconductors. A spokeswoman said the spun-out operation will be wholly owned by Siemens initially, but it appeared that over time, Siemens will reduce its share in the company. The IPO should open the business to future partnerships or mergers, and foster the semiconductor group`s need to be more flexible and faster to market, the spokeswoman added.

CEO Heinrich von Pierer said the reason for divesting the business is the group`s high demand for capital for which Siemens "can no longer satisfy alone over the long term. The semi- conductor business is marked by unsteady growth with huge fluctuations in earnings. The business offers opportunities to those more oriented toward risk ventures," von Pierer added. - C.L.