Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 10 pages
Data source: Published sources
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https://casecent.re/p/66536
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Abstract
The semiconductor industry is considered a highly volatile industry. There are frequent changes in technology, which constantly influence demand and supply. Philips failed to sustain its semiconductor division in the light of these fluctuations. The huge investment requirement and the volatile earnings further compounded their problems. In 2005, Philips Electronics decided to separate its chip division as an independent legal entity. The company has the options to go for an initial public offering, merger or a spin-off. Analysts speculate that a merger might be the option chosen in the end. The case study highlights the reasons underlying Philips'' decision to divest its semiconductor division and provides scope to discuss the different strategic options available to Philips for consideration.
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Abstract
The semiconductor industry is considered a highly volatile industry. There are frequent changes in technology, which constantly influence demand and supply. Philips failed to sustain its semiconductor division in the light of these fluctuations. The huge investment requirement and the volatile earnings further compounded their problems. In 2005, Philips Electronics decided to separate its chip division as an independent legal entity. The company has the options to go for an initial public offering, merger or a spin-off. Analysts speculate that a merger might be the option chosen in the end. The case study highlights the reasons underlying Philips'' decision to divest its semiconductor division and provides scope to discuss the different strategic options available to Philips for consideration.