Freescale and Samsung

It is impossible to keep a secret in this business. Everyone knows that Freescale is being shopped around and there is interest.

From Yahoo Finance:
The parties that Freescale is speaking to could not be learned. The New York Post first reported that Freescale was working with investment banks to explore a sale. Freescale shares were up 8.5 percent at $37.66 in morning trading, giving it a market value of $11.5 billion.

Well, I’ve done some learning and apparently Samsung is the suitor and the deal is pretty much done. Of course no deal is done until it is done, and one of the reason for engaging investment bankers is to get the price up by getting some other players into the ring. Samsung would make a lot of sense, they already have a major presence in Austin where Freescale is headquartered. In fact I believe the Samsung fab in Austin is the largest in the US, bigger than anything Intel has, or GlobalFoundries or…anyone else…Micron I guess.

About half of Freescale’s business is automotive, a fast growing market now and for the future (driverless cars don’t really drive themselves, a lot of semiconductors do) and area where Samsung is not strong. I expect they supply a lot to Hyundai and Kia, that is the way Korea works, but globally they are not the name that leaps of everyone’s tongue. The US in particular is a huge automotive market. Not just the big 3 but transplant factories for BMW, Mercedes, Toyota, Honda and others. Most of the rest of Freescale is various forms of communication (but not mobile, they exited that business a few years ago after they failed to find a buyer for it).

Freescale was a spinout of Motorola’s SPD, silicon products division, taken private by Blackstone, Carlyle and TPG Capital (and maybe some other smaller companies). The first CEO was Rich Beyer (a name to make any salesman’s heart leap for joy) who was COO at VLSI for a couple of years and I used to give weekly tutorials to about how designs were done and what EDA was. In 2011 Freescale went public (it was never public before, of course, except as part of Motorola which was). The buyout companies still own almost 2/3 of the company.