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Richard Clemmer talks about NXP's IPO

Posted: 11 Aug 2010 ?? ?Print Version ?Bookmark and Share

Keywords:IPO? fab? stock market? Nasdaq?

NXP Chairman and CEO Richard Clemmer shared that NXP Semiconductor's stock, which opened on NASDAQ last week, is being received quite well. With NXP getting most of the proceedings after costs from the offering, the chip maker gets a chance to further bolster its financial position and the management has no concerns about its long-term viability, Clemmer said.

With the IPO now completed, NXP's management focus returns to satisfying customers in a capacity constrained market, according to Clemmer. "The biggest challenge that we have in the near time is making sure that we have sufficient capacity to support our customers," he said.

Through the first half of this year, NXP has spent about $100 million on capital expenditure compared with $80 million for 2009. The company is in conjunction with Taiwan Semiconductor Manufacturing Co. Ltd., planning to lift capacity at a fab in Singapore and boosting test, assembly and packaging capabilities.

Excerpts from an EE Times interview follow:

EE Times: Does being a publicly traded company change how NXP relates with its varied audiences?

Clemmer: I don't think it changes our objectives or challenges. It's just that it raises the hurdles with which we have to improve our execution on a consistent basis.

EE Times: There were in the past concerns about NXP's ability to survive due to the company's high long-term debts. Are you satisfied with your current financial position and do you believe the company will continue to be a viable long-term entity?

Clemmer: No doubt. In the second quarter, we had about $1.1 billion of earnings before interests, taxes, depreciation and amortization. Now that we have pushed out $1 billion of our debts from 2013 and 2014 to 2018, no significant debts that are coming due until the second half of 2013, and strong cash flow we have no concerns about our debt position at all.

EE Times: What does the IPO mean for NXP's future prospects?

Clemmer: The IPO is significant for NXP in the continuation of our transformation and positioning the company for leadership in high-performance mixed-signal semiconductor. The progress we have made in the past year and a half is quite amazing. The IPO is just another step in the progress that we need to continue to make.

EE Times: Is NXP getting all of the proceeds from the share sale or are your private equity owner also getting part of the proceeds?

Clemmer: All of the proceeds of the primary shares sale will improve the balance sheet of NXP. Our shareholders are not selling any shares at the moment. They are prohibited from selling shares for six months. Most of our private equity owners, I would expect, would not be willing to sell their shares until the equity price improves to the extent that it would be above their costs. In the case of Philips [former parent of NXP], the company has said as detailed in our proxy statement that they are reviewing the potentials of transferring their ownership to a couple of pension plans so they would become long-term shareholders.


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