Siemens prepares to rid itself of semiconductor business
Semiconductor op. be listed on stock exchange, 60,000 jobs to go -- many to outer space, apparently
In a bid to pre-empt leaks -- "Our experience has shown we can't keep such things secret," said president and CEO Heinrich Pierer -- Siemens today announced its fiscal 1998 results and revealed details of its plan for sustainable growth. Central to the strategy is the company's withdrawal from the components business. The key section of Siemens' Components division, its semiconductors operation, will be listed on the stock market. Pierer claimed the motive behind the move was nothing to do with the Semiconductors division's earnings -- some areas, he said, including power semiconductors, high-frequency ICs and chipcard ICs continued to be strong and contribute to the company's bottom line. "The primary reason is the high demand for capital, which we can no longer satisfy alone over the long term," he said. "The semiconductor business is marked by high, yet unsteady growth with huge fluctuations in earnings. This has a major impact on the company's overall results." The IPO, he added, would "open up new entrepreneurial opportunities" within the company and make the business well suited for "partnerships or mergers". The company will also seek the best way to divest itself of its Passive Components and Electron Tubes section, said Pierer, probably by selling it to Matsushita. These moves, plus changes to Siemens' industrial operations, represent the sale of around DM17 million, one-seventh of Siemens' worldwide total revenue, or as Pierer put it, 60,000 employees. It's not clear whether this includes the jobs cut as part of the closure of the company's Tyneside fab. However, he showed some confusion over where these jobs will go. "This does not mean 60,000 jobs will be lost. On the contrary, these jobs will have a far better long-term perspective in a different constellation," he said ungrammatically. We naturally expect news of a merger with the people of Betelgeux, one of the major stars in Orion, real soon now... Siemens' 1998 results showed profits rise just two per cent to DM2.66 billion. However, despite the sale of the company's Defence Electronics group, restructuring charges brought that down to a loss of DM1.74 billion. Orders rose six per cent during the year to DM119.6 billion, while sales grew by ten per cent to DM117.8 billion. The Semiconductor operation was highlighted for its negative contribution to Siemens results -- it lost DM1.2 billion compared to a profit of Dm109 million last year. Siemens Nixdorf saw a "light decline" in earnings thanks to "massive pressure on prices in the entire industry". ® Click for more stories Click for story index
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