Freescale revs its engines going into 2nd year - East Valley Tribune: Business

Freescale revs its engines going into 2nd year

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Posted: Saturday, July 30, 2005 6:34 am | Updated: 8:51 am, Fri Oct 7, 2011.

In one year, the stock of Freescale Semiconductor Co. has risen from $13 to more than $25 a share. The former Motorola semiconductor division has grown from the 11th-largest to the ninth largest semiconductor business in the world, according to IC Insights, a Scottsdale-based market research firm.

And the company has been receiving a slew of "best supplier" awards from its major customers.

"We are proud," said Demetre E. Kondylis, general manager of the company’s Sensor and Analog Products Division in Tempe, of the company’s first-year performance. "But we are not going to take our eye off the ball. We’re still not where we need to be."

Austin, Texas-based Freescale is celebrating the oneyear anniversary this month of its spinoff from Motorola to become an independent company.

On Friday the company’s sensor and analog products division, a major supplier of microcontrollers to the auto industry, received three awards from Visteon, a Michigan-based auto parts supplier, adding to other awards the company has received this year from General Motors, Toyota, Delphi and other auto -industry companies.

Freescale, with $5.7 billion in annual sales, is the largest supplier of integrated circuits to the auto industry. Microcontroller units supplied by Freescale perform such functions as controlling engine parts for greater fuel efficiency, operating electronic gadgetry and activating air bags in an emergency.

The electronic content of automobiles continues to grow, and with the potential for fuel-efficient hybrid cars to become more popular, the use of integrated circuits in motor vehicles are likely to expand even further.

Kondylis said Freescale has spent its first year of existence establishing a firm foundation as an independent entity, a process that culminated last week when the company reported a second quarter profit of $122 million, or 29 cents a share, compared with $85 million in the same quarter last year. With the financial fundamentals in place, the company is ready to move on to phase 2 — more aggressive pursuit of growth, he said.

In addition to expanded auto sales, the company sees prospects for growth in semiconductors for thirdgeneration cell phones and consumer products such as media players and digital cameras, he said.

In Arizona, the company employs about 3,000 at campuses in Tempe and Chandler, out of a worldwide work force of about 22,000.

The size Arizona work force has remained steady in the past year, and no hiring campaigns are planned, Kondylis said. The staff "will grow appropriately," he said.

Tony Massimini, chief of technology for Semico Research, a Phoenix-based market research firm, said Freescale’s performance has been good in light of the softness in the semiconductor industry in the first half of this year. He added that the improvement in the company’s earnings is an indication that Freescale has taken control of its costs.

He said one of the goals of the company will be to diversify from the automobile industry, which provides steady but not spectacular growth.

"The automotive market is a good port in the storm," he said. "It won’t provide spectacular growth, but when times are tough, it holds up."

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