Motorola Chief Hints At Eventual Chip Unit Sale

Motorola Inc.'s chairman of the board and chief executive, Chris Galvin, hinted this week that the company might consider the sale of its struggling semiconductor business once that unit returned to profitability.

Speaking at the UBS Warburg's Global Telecom Conference in New York, Galvin compared the Semiconductor Products Sector (SPS) to Motorola's government business division that it recently sold. "Two years ago we were losing a lot of money in the government business, and we said there is no sense in selling it now or disposing of it now," Galvin said. "We fixed it. We got it generating significant positive cash flow and double-digit pretax profits. We sold that [business] last September."

SPS must first generate a certain sell-off value before the possibility will be on the table, Galvin said. "If you look at [it] from a marketplace standpoint and [the business] is valued at two, four, or six, or eight times sales, one can decide whether you want that in the portfolio or not," he said. "That's the essence of the plan we are working on right now [for SPS]."