Philips to spin off semiconductor division

Natick, Mass.–Philips Semiconductor recently announced plans to spin off or sell its semiconductor business by the end of the year. As stated in their 2005 annual report, the firm’s intent of this action is to provide the division “flexibility to pursue other strategic options to strengthen its long-term performance.” The company stated it would pursue an IPO, but is also accepting bids from private equity firms.

What does this mean to the RFID industry? All semiconductor products manufactured by Philips are included in this transaction, even RFID. The RFID IC business for the firm represents less than 5% of their total semiconductor revenues; however, in the RFID ‘world,’ Philip’s share is significant.

Current VDC research places Philips Semiconductor as a leader in RFID transponder ICs, representing nearly 30% of the total transponder IC market. In addition, Philips RFID contactless smart card ICs have been selected for use in several countrywide e-passport efforts (representing up to 75% of total worldwide e-passport projects) and the firm, in conjunction with HP, has helped facilitate adoption of the latest RFID global standards.